Manufacturing in the Big Apple has surpassed analysts’ expectations, signaling strong growth for this critical component of the nation’s economy and infrastructure. Earlier this week, the Federal Reserve Bank of New York released its report, in which it found that New York’s Manufacturing Index increased to 1.5 for the month. As we’ve discussed previously here on our blog, any reading above zero signals growth and expansion, which is exactly where manufacturing companies want to be.
But 1.5 isn’t just “growth;” it’s fast, large growth. In October 2015, for instance, New York’s manufacturing industry had a Manufacturing Index of -6.8 (yes, that’s a negative), signaling shrinkage for the industry. However, it’s safe to say things have turned around in a positive direction, as New York’s Manufacturing Index is back in the green zone.
If you we look more closely at the report, it reveals that new orders are supporting a stronger economy in New York. New orders increased by 8.7 points, reaching an index of 3.1. This is yet another indication of a strong manufacturing industry in New York.
Of course, this doesn’t necessarily mean that the manufacturing industry in New York will continue growing at its current pace. Analysts say the market is susceptible to certain factors, such as employment cutbacks. Many manufacturers in the Big Apple are laying off workers and cutting back on their workers’ existing hours. This has led some analysts believe that the industry could face a downturn in the following months.
Furthermore, manufacturers have been battling with a strong U.S. dollar. As you may already know, a strong dollar makes their products more expensive. And when products are too expensive, sales begin to slow and manufacturers generate less revenue. This is why it’s important for the Feds to manage the economy, adjusting interest rates when needed to ensure people are spending; otherwise, it could hurt manufacturing companies as well as companies in other industries.
The U.S. Senate also recently released a report on the U.S. manufacturing industry, suggesting that it’s still overcoming a “prolonged” period of weakness and slow growth. The Federal Reserve revealed last month that factory production increased by 0.2% in September. Since then, however, production has been relatively stagnant, neither growing nor shrinking. That’s not necessarily bad news, but it’s not good news either. In any case, manufacturers in New York and throughout the country are staying optimistic about strong growth.
Do you think the New York manufacturing industry is doing well?