Manufacturing activity in New York state expanded at a moderate pace, the May Empire State Manufacturing Survey conducted by the Federal Reserve Bank of New York reported.
The general business conditions index rose 11 points to 17.1 after plunging to 6.6 in April. Readings greater than zero indicate expansion in the manufacturing sector.
The new orders index increased slightly to 8.3, while the shipments index shot up 18 points to 24.1, the highest level in a year.
Manufacturers appear to be seeing some relief on prices they are paying for various inputs. The prices paid index fell eight points to 37.4, indicating more moderate price increases. The price index has fallen for the past two months.
Asked about the past 12 months, manufacturers reported that the prices they paid for inputs rose 3.6% on average. This was down substantially from the 8.1% increase reported in May 2011.
The prices received index fell seven points to 12.1, signaling that manufacturers are only able to pass along modest price increases.
Manufacturers told the New York Fed that they had increased prices an average of 1.7% over the past year. Looking ahead for the next 12 months, manufacturers surveyed estimated they would increase prices an average 2.1%.
The survey showed manufacturing employment holding up, with the number of employees index inching up from 19.28 in April to 20.48 in May. The average employee workweek index rose from 6.02 in April to 12.05 in May.
Looking ahead six months, respondents were not as optimistic as they had been in recent months. The future general business conditions index fell 14 points to 29.3 and the future new orders index fell 16 points to 30.1.