Manufacturing in America continues to struggle.
The New York Fed’s Empire State Manufacturing Survey index plunged to -19.37 in January from -6.21 in December.
“Business activity declined for New York manufacturing firms more sharply than at any time since the 2007-09 recession, according to the January 2016 survey,” the New York Fed said.
This is in line with the theme of a struggling American manufacturing sector, which has seen the demand for exports get slammed by the strong dollar and slowing growth overseas.
“We continue to see soft momentum in industrial activity and expect little to change in the coming months,” BNP’s Bricklin Dwyer said. “Today’s data suggests some downside risk to our already subdued expectations for 2016.”
Earlier this month, we learned the ISM manufacturing index fell to 48.2 in December, reflecting a nationwide recession in manufacturing.
The Empire State survey’s new orders index, which is an indicator of future activity, plunged 17 points to -23.5.
And the survey respondents don’t think it will get much better in the near term.
“Indexes for the six-month outlook fell sharply this month, suggesting that optimism about future business conditions weakened considerably,” the survey said. “The index for future business conditions plunged twenty-six points to 9.5, its lowest level since 2009.”
While manufacturing accounts for a relatively small portion of the US economy, it nevertheless seems to be a reliable indicator of general aggregate economic activity.
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