NY Manufacturing Down
WASHINGTON (AP) Manufacturing activity in New York shrank in April for the first time in four months, a sign that the strong dollar and sluggish consumer spending may be holding back factories.
The Federal Reserve Bank of New York said Wednesday that its Empire State manufacturing index fell to negative 1.2 reading from a plus 6.9 in March. The latest reading is the lowest since December. A reading below zero indicates contraction.
The dollar has jumped 28 percent against the euro since last June and has also risen compared with the Japanese yen and other currencies. That makes U.S. exports much more expensive. A sharp fall in oil prices in the past year has also led oil and gas drillers to cut back on their investments in new wells, lowering output of steel pipe.
A measure of new orders fell for the third straight month to negative 6, which suggests output may remain sluggish in the coming months. The pace of hiring also slowed, though manufacturers in the state continued to add jobs.
The survey provides an early look at U.S. manufacturing each month. The New York Fed surveys 200 businesses in the state and typically receives responses from 100.
On a brighter note, New York manufacturers are more optimistic about business conditions in six months than they were in March, the report says. A measure of their future outlook rose to 37.1 from 30.7 in March.
Analysts at the New York Fed said that April's weakness could reflect the lingering impact of harsh winter weather in the region. That could also explain why their future expectations have turned more positive.
A separate survey earlier this month by the Institute for Supply Management found that factories nationwide expanded in January at the slowest pace in a year.