New York manufacturing activity contracted at the fastest rate on record in the month of April, according to a report released by the Federal Reserve Bank of New York on Wednesday.
The New York Fed said its general business conditions index plummeted to a negative 78.2 in April from a negative 21.5 in March, with a negative reading indicating a contraction in regional manufacturing activity. The index was expected to slump to a negative 35.0.
With the much bigger than expected nosedive, the general business conditions index plunged to its lowest level in the history of the survey—by a wide margin.
The steep drop by the headline index reflected record declines by the new orders and shipments indexes, which plunged to a negative 66.3 and a negative 68.1, respectively.
The number of employees index also nosedived to a negative 55.3 in April from a negative 1.5 in March, indicating a record contraction in employment.
The report also said the prices paid index tumbled to 5.8 in April from 24.5 in March, while the prices received index slumped to a negative 8.4 from a positive 10.1.
Meanwhile, the New York Fed said firms expect conditions to be slightly better six months from now, with the index for future business conditions rising to 7.0 in April from 1.2 in March.
“The index measuring manufacturing firms’ expectations rebounded slightly in April, but still signals a weak outlook,” said a note from economists at Oxford Economics.
The economists added, “Severely depressed demand, supply disruptions and extremely high uncertainty will keep manufacturing on an extremely weak trajectory in the near term.”
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