The Empire State Manufacturing survey of manufacturers in New York State released April 15 by the Federal Reserve Bank of New York showed business activity in the state plummeting to never-before-seen lows. The general business conditions index fell 57 points to -78.2. A full 85% of respondents reported that business conditions had worsened, while 7% said they improved. New orders and shipments also sharply declined.
The COVID-19 crisis has led to the lowest general business conditions index recorded in the history of the Empire State’s survey. The previous record low was in April 2009, during the Great Recession, when the general business index fell to -34.3. The survey has been issued monthly since 2001.
The indexes for shipments and new orders both followed the general business index’s tumble. The shipments index fell from -1.7% in March to -66.3% in April, with 76.6% of respondents predicting worse conditions for shipments. The new orders index fell 56.7 points to -78.2% in April, with 85.2% of respondents anticipating fewer orders.
The Empire State survey also recorded sharp declines in number of employees and average employee workweek: 58.6% of manufacturers reported lower employment levels, and 64.7% reported a shorter work week. The indexes for both measures were -55.3% and -61.6%, respectively. Both measures fell at least 50 points compared to their March results, another record.
Other indexes reported less dramatic but rarely reassuring changes. Respondents reported longer delivery times, smaller inventories, and small declines in selling prices. One index held a ray of positivity, though. The index for future business conditions, previously at 1.0%, rose six points to 7.0%, indicating that manufacturers see business conditions in the next six months improving slowly. Indexes for future new orders and future shipments declined slightly but remained positive.
The April results were collected between April 2 and 10, right as New York City was repeatedly hit by record infections and deaths. Queens, the hardest-hit of the city’s five boroughs, has reported more than 33,000 cases of the virus alone.
