New York region manufacturers are the most optimistic since the Great Recession

Key Points
  • The Empire State Manufacturing Index rose to -0.2 in June vs. market expectations of -35.
  • Activity gauges rose across the board, with the biggest move coming in the future business conditions index, which hit its best level since October 2009.
  • The June reading shows a marked increase from record lows in March and April but still overall reflects sluggish growth.
Empire State Index drops -0.2 in June, versus -35.0 expected
Empire State Index drops -0.2 in June, versus -35.0 expected

Manufacturing activity snapped back to life in the New York area this month, and optimism for future activity hit its highest level in almost 11 years.

The Empire State Manufacturing Survey posted a reading of -0.2 in June after hitting record lows in the previous two months. The gauge, which measures the percentage firms reporting expansion against those seeing contraction, is up 48.3 points from May. Economists surveyed by Dow Jones had expected a reading of -35.

Monthly improvement came across the board, especially in the index of future business conditions. That level rose to 56.5, its highest level since October 2009 as 68.6% of firms see expansion ahead against just 12.1% that see contraction.

The June reading represents a rise off the bottom reached as the coronavirus pandemic crushed the regional economy, but overall still reflects a standstill in growth vs. the sharp contractions seen in the past two months.

Big gains also came from new orders, which surged from -42.4 to -0.6; shipments, which rose 42.3 points to 3.3 and prices paid, up 12.8 points to 16.9.

Number of employees also showed an uptick, going from -6.1 to -3.5, though still in contraction territory.

The improving conditions come in a region that's one of the slowest in the U.S. to reopen its economy from the coronavirus crisis. New York City in particular was one of the hardest-hit spots in the world, with the 17,193 deaths accounting for about 15% of the nation's total. 

In recent weeks, the state has begun to reopen slowly, primarily in northern areas away from the crowded urban centers that were hit hardest.

The U.S. economy entered recession in February after the longest expansion in its history.