The Federal Reserve Bank of New York released a report on Wednesday indicating that regional manufacturing activity contracted at a slightly faster pace in May than previously anticipated.
According to the New York Fed, the general business conditions index dipped to -15.6 in May from -14.3 in April, with a negative reading signifying contraction. This decline surpassed economists' expectations, who had forecasted an improvement to -10.0.
The report highlighted a notable reduction in new orders, as the new orders index decreased slightly to -16.5 in May from -16.2 in April.
Additionally, the number of employees index fell to -6.4 in May from -5.1 in April, pointing to a marginally quicker decline in employment.
In contrast, the shipments index saw a substantial rise to -1.2 in May from -14.4 in April, although it still remained in contraction territory.
The report also noted a decrease in the prices paid index, which fell to 28.3 in May from 33.7 in April. Similarly, the prices received index declined to 14.1 from 16.9.
Looking forward, the New York Fed mentioned that optimism about the future outlook remained modest, even though firms generally expect conditions to improve over the next six months.
The index for future business conditions slightly decreased to 14.5 in May from 16.7 in April, with roughly 25% of respondents anticipating worsened conditions in six months.
Separately, on Thursday, the Philadelphia Federal Reserve is set to release its report on regional manufacturing activity for May. The Philly Fed Index is projected to drop to 8.0 in May from 15.5 in April; however, a positive reading would still indicate growth.
