NYS factory output continues to contract

Manufacturers in New York State reported continued weakness in business conditions for the third month in a row in October, according to the Empire State Manufacturing Survey.

The monthly report of manufacturing activity released Monday by the Federal Reserve Bank of New York showed that the index for general business conditions jumped about four points, to negative 6.2 from negative 10.4 in September. But the negative reading indicates that manufacturing activity has continued to contract.

New orders also continued to decline, despite the fact the index reading increased compared to September, moving up to negative 9.0.

The global economic slowdown -- including the recession in the European Union and decelerating growth in China -- is one of the contributing factors hampering manufacturing activity, said Pearl Kamer, economist for the Long Island Association. In September, both the general business index and new orders index reported the lowest figures since 2010.

Nationwide, manufacturing took a positive turn in September for the first time since May. The Institute for Supply Management reported earlier this month that its manufacturing activity index in the United States for September was 51.5. A number above 50 indicates the sector grew.

Although historical data has shown that New York State economic trends lag behind national activity -- and thus state manufacturing may see a lift soon -- Kamer said she does not think a bullish figure would last for long.

"I don't see anything that would reverse course for manufacturers in the Empire State or nationally. I think manufacturing will have a tough time for at least the next three to six months," she said.

A series of supplementary questions in the October Empire State survey asked manufacturers about their need for financing. More than 26 percent of manufacturers said their borrowing needs had increased during the past year, compared to 17 percent that reported a decrease.