Are Trade War Worries to Blame for Plunging Optimism of NYS Manufacturers?

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The Empire State Manufacturing Survey for April indicated continued manufacturing growth in New York State, albeit at a slower pace as the index  declined 6.7 points to 15.8 (a reading above 0 indicates expansion).

In startling contrast, the Forward-Looking Business Conditions Index, based on NYS manufacturers’ expectations of conditions six months from now, plunged -25.8 points to 18.3  after just reaching a multi-year high in February.  It is the largest one month drop in over 17 years since a fall of -61 points after the 9/11 Attacks.  The reason(s) for this drop are not spelled out in the survey, but there are hints that worries about tariffs and a potential trade war are weighing on NYS manufacturers.  Forward-looking indices for Prices Paid (+54.8 down -1.1 points) and Prices Received (+31.1 up 3.1 points) remained high, suggesting manufacturers expect both their input prices and their selling prices to remain high.  However, every other forward-looking index fell, led by sharp drops in New Orders (down -24.5 points) and Shipments (down -24.8 points).  See the full report here.

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