Manufacturers in New York state are growing more upbeat about the demand outlook, just as the U.S. and China announced a thawing in their trade relationship.
The Federal Reserve Bank of New York’s survey measure of general business conditions in the next six months jumped 10.4 points in December to a five-month high of 29.8, according to a report Monday. The bank’s gauge of the orders outlook advanced 11.4 points to 35.6, the strongest since February.
The U.S.-China tariff war has been blamed for holding back business investment, and now that could be changing. The Fed survey showed the outlook for capital expenditures climbed, while expectations for technology spending matched the highest since 2011. Factory manager outlooks for sales, unfilled orders and delivery times rose.
Even with the bump in optimism, manufacturers have yet to see much of a change in sluggish demand. The New York Fed’s headline measure of current general business conditions crept up to 3.5 in December from 2.9 as orders grew at a slower pace. Readings above zero signal expansion.
By Vince Golle