New York Manufacturing Contracts at Fastest Pace on Record as Orders Slump

[Purveyor]

Source: Bloomberg

March 16 (Bloomberg) -- Manufacturing in New York contracted in March at the fastest pace on record as orders, sales and inventories plunged.

The Federal Reserve Bank of New York’s general economic index dropped to minus 38.2, the lowest level since data began in 2001, from minus 34.7 in February, the bank said today. Readings below zero for the Empire State index signal manufacturing activity is shrinking.

The collapse in global trade, alongside a U.S. economy in its second year of recession, is causing manufacturers to pare back production as demand plummets. The subsequent payroll cuts have prompted the Obama administration to pledge to save or create 3.5 million jobs through tax cuts and more spending.

“The woes for the manufacturing sector continue,” said Ellen Zentner, a senior U.S. macroeconomist at Bank of Tokyo- Mitsubishi UFJ Ltd. in New York, who had the closest forecast. “We expect economic growth from our major trading partners to continue to suffer.”

A separate report showed industrial production nationwide fell in February for the fourth consecutive month. Output at factories, mines and utilities dropped 1.4 percent last month, more than forecast, after a revised decline of 1.9 percent in January, the Fed said in Washington. Manufacturing accounts for four-fifths of industrial production.

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