Coronavirus Hammers Factory and New Order Indexes in Philadelphia, New York
The spread of the infectious disease COVID-19 weighs heavily on the minds of manufacturing executives on the United States’ northern East Coast. Both the Empire State Manufacturing Survey (which covers manufacturing in New York state) and Philadelphia Federal Reserve Bank manufacturing business outlook survey (which covers parts of Delaware, New Jersey, and East Pennsylvania) fell dramatically.
The New York survey, which was collected between March 2 and March 10, reported that sentiment on general business conditions fell 34 points to -21.5%. The drop is the survey’s sharpest point drop on record. The survey’s index for future business conditions was also grim, recording a drop of 22 points to 1.2 on how confident respondents were about business conditions for the coming six months. Both figures are now at lows not seen since 2009.
The Philadelphia survey’s diffusion index of new orders, which gauges perceived turning points in the economy, fell 49.4 points from a three-year high of 36.7 in February to -12.7 in March—a low not seen since 2012. Indexes for new orders in the New York survey dropped 31 points to -9.3.
Despite dramatic unemployment numbers coming out of the Bureau of Labor Statistics, which said March 19 that unemployment benefits claims had jumped by 70,000 in the previous week, neither index noted particularly dramatic movements in manufacturing unemployment. The New York index’s manufacturing employment figure fell 8 points to -1.5, while the Philadelphia Federal Reserve’s employment index increased 6 points. This might reflect that gains in employment figures over the past several months have mostly left manufacturing as a sector behind.
The Philadelphia indexes, collected between March 9 and March 16, noted that lows in general activity, new orders, and shipments are “coinciding” with coronavirus developments, and the Empire State survey issued a supplemental survey that indicated that 48% of manufacturers reported adverse effects.
