Labor Market Shows Weakness in New York Manufacturing Survey

Superstorm Sandy affects activity of 100% of New York City area firms.

Labor market conditions weakened noticeably in New York, according to the November Empire State Manufacturing Survey, as the monthly index fell 14 points to -14.6, its lowest level since 2009.

General business conditions continued slightly negative for the fourth consecutive month, with the index little changed at -5.2, the Federal Reserve Bank of New York reported.

The new orders index rose to 3.1, a 12-point rise and the first time it was above zero since June. The shipments index also rose by 21 points, to 14.6.

New York firms were asked how their businesses were affected by Superstorm Sandy. Only 21% of upstate New York firms were affected, in most cases only for a day. But in the New York City area, 100% of firms reported some loss of activity. Asked how long their business was shut down or severely crippled, more than 90% of downstate businesses reported at least one day and more than 40% said it lasted five days or more. The most widely cited problems were loss of power and loss of communication.

Asked about business conditions in the next six months, New York manufacturers offered a mixed view. The future general business conditions index fell to 12.9, its lowest level since 2009, but both the future new orders index and the future shipments index climbed. Respondents expect employment levels and hours worked to remain largely unchanged in the near future. Plans for capital expenditures showed a modest rise but technology spending plans were down slightly.

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