Two regional manufacturing surveys came out this week hinting that the slowdown resulting from the trade war with China, along with slowed global growth, may have concluded its run. Slower production output from American companies during the last two quarters of 2019 had many concerned about an impending recession, but things are looking up.
The Empire State Manufacturing Survey queries New York manufacturers on a monthly basis regarding general business conditions. The Federal Reserve Bank of New York conducts the surveys. This week’s survey results revealed a significant rebound well beyond Wall Street expectations for the manufacturing sector. These indices represent a percentage measure of companies reporting growth or contraction expectations.
The New York survey results this week showed the seasonally-adjusted index at 12.9, up 8 points from January. This is the strongest number seen since May 2019. The report also revealed new orders had climbed to 22.1. The last time these numbers were seen was Sept. 2017. Shipments, another leading economic gauge, were at 18.9, a number last seen in November 2018.
Thursday, the Philadelphia survey results were published showing an unexpected 20-point hike to 36.7, the highest since February 2017. New orders were at the highest level since May 2018. While both state surveys showed employment had not improved, they did confirm strong activity from the manufacturing sector.