Growth In New York Manufacturing Activity Unexpectedly Rebounds In September
September 15 2021 - 5:29AM
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After reporting a notable slowdown in the pace of growth in
regional manufacturing activity in the previous month, the Federal
Reserve Bank of New York released a report on Wednesday showing an
unexpected rebound in the pace of growth in the month of
September.
The New York Fed said its general business conditions index
surged up to 34.3 in September after plunging to 18.3 in August,
with a positive reading indicating growth in regional manufacturing
activity.
The substantial rebound in the pace of regional manufacturing
growth came as a surprise to economists, who had expected the index
to edge down to 18.0.
The pace of growth in both new orders and shipments showed
significant rebounds, contributing to the bounceback by the
headline index.
The new orders index spiked to 33.7 in September from 14.8 in
August, while the shipments index soared to 26.9 from 4.4.
The report showed the number of employees index also climbed to
20.5 in September from 12.8 in August, indicating an acceleration
in the pace of job growth.
Meanwhile, the New York Fed noted the delivery times index
jumped to a record high of 36.5 in September from 28.3 in August,
pointing to significantly longer delivery times.
The prices received index crept up to 47.8 in September from
46.0 in August, while the prices paid index edged down to 75.7 from
76.1.
Looking ahead, the New York Fed said firms remained very
optimistic that conditions would improve over the next six
months.
The index for future business conditions inched up to 48.4 in
September from 46.5 in August, with capital spending and technology
spending plans increasing markedly.
"New York manufacturing's prospects are fairly bright, with
upbeat goods demand, rising business investment, and rebounding
demand from abroad slated to keep activity growing at a healthy
clip into 2022," said Oren Klachkin, Lead U.S. Economist at Oxford
Economics.
He added, "However steadfast supply chain and hiring challenges
will concurrently limit the expansion, and these headwinds won't
diminish significantly until the Covid crisis is effectively
contained at home and abroad."
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