The headline index was unchanged from last month at -5.
Economists were looking for a rise to -1.
In other words, the regional economy continues to contract at a moderate pace this month.
Below is the full text from the release:
Tenth District manufacturing activity continued to fall modestly, at a pace similar to last month, and producers’ expectations moderated while still remaining positive overall. Of the firms that reported optimism on future activity, several cited new product opportunities and pent up demand as key reasons for a more positive outlook. However, other firms noted their outlook has deteriorated since the beginning of the year. Most price indexes decreased somewhat or were relatively unchanged from the previous month.
The month-over-month composite index was -5 in April, equal to -5 in March but up from -10 in February (Tables 1 & 2, Chart). The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Durable goods-producing plants reported a smaller decline in activity, but production at nondurable-goods plants fell after increasing last month, particularly for food and plastics products. Most other month-over-month indexes improved somewhat. The production index edged higher from -1 to 1, and the shipments index also increased, with both indexes moving into positive territory for the first time in 8 months. The employment index rebounded from -15 to -3, and the order backlog index also rose. The new orders and new orders for exports indexes were basically unchanged. Both inventory indexes fell further into negative territory after increasing last month.
The majority of year-over-year factory indexes declined. The composite year-over-year index fell from -1 to -6, and the production, shipments, new orders, and order backlog indexes also decreased. The capital expenditures index moderated but remained positive, and the employment index fell into negative territory for the first time since October 2010. The new orders for exports index declined from -3 to -12, its lowest level in nearly four years. The raw materials inventory index edged down from -6 to -11, and the finished goods inventory index fell back into negative territory.
Most future factory indexes decreased after improving last month, but still remained positive. The future composite index fell from 14 to 4, and the future production and shipments indexes declined to four-year lows. The future new orders index dropped from 30 to 9, and the future order backlog and capital expenditures indexes also decreased. The future employment index moderated from 12 to 8 after increasing last month. The raw materials inventory index fell from -2 to -7, and the finished goods inventory index also eased somewhat.
Most price indexes moderated slightly or were unchanged from the previous month. The month-over-month raw materials price index declined from 19 to 7, while the finished goods price index was unchanged at -1. The year- over-year raw materials and finished goods price indexes eased slightly. The future raw materials price index remained stable at 38, while the future finished goods price index inched higher, indicating more firms plan to pass recent cost increases through to customers.
Here is what the survey respondents are saying:
- “Our expectations for future increases have cooled considerably in the last few months. New business opportunities are not coming forth as previously expected. Retailers are making changes in supply as expected, probably driven by more aggressive pricing tactics by incumbent suppliers.”
- “Europe looks bad and getting worse. U.S. economic activity seems to be slowing. We are retrenching.”
- “Business activity has slowed down and commodity prices are weak, but demand is fairly stable. However, supply is abundant and new orders are soft.”
- “We are focused on new product innovation and are gaining additional customers from competitors with more aggressive selling and marketing activities.”
- “We’re starting to see the end of the natural gas boom. We expect a downturn in coming months.”
- “Capital goods orders have slowed considerably. European orders have not kicked in as in past years, and American business has dried up. Small manufacturers continue to be squeezed.”
- “Strengthening construction spending is spurring more demand for heavy building materials. We are forecasting continued growth in construction spending in 2013 and improving demand for our products.”
- “We keep hearing from customers that a lot of activity is ‘in the works’. It seems people believe it is going to get better and there is going to be additional work out there. However, this bubble of work keeps getting pushed out.”
- “We have seen more innovation in product development. In most cases we’ve seen customers beginning to consider expansion of product lines, etc. This hasn’t been the case in recent months.”
- “We have diversified our products and opened new opportunities. The ability to expand our capabilities is the biggest contributor to the positive expectations.”