In April, New York State manufacturing continued shrinking, with business sentiment hitting its lowest point since 2001.
In April 2025, manufacturing activity in New York State shrank for the second month in a row, with the general business conditions index rising from -20.0 to -8.1, but it still stayed in negative territory. The six-month business outlook index dropped to its second-lowest point since 2001, showing a dip in confidence. Recent shifts in tariff policies have increased economic uncertainty, pushing up the costs of raw materials and factory prices, and adding pressure on manufacturers.
Key Updates
04/15 18:20
In April, New York State manufacturing continued shrinking, with business sentiment hitting its lowest point since 2001.
In April 2025, manufacturing activity in New York State shrank for the second month in a row, with the general business conditions index rising from -20.0 to -8.1, but it still stayed in negative territory. The six-month business outlook index dropped to its second-lowest point since 2001, showing a dip in confidence. Recent shifts in tariff policies have increased economic uncertainty, pushing up the costs of raw materials and factory prices, and adding pressure on manufacturers.
New York Manufacturing Index Rebounds but Remains Contracted
According to the "Empire State Manufacturing Survey" released by the New York Fed on April 15, the overall business conditions index for New York State manufacturing rose from -20.0 in March to -8.1 in April. Although this is better than the market expectation of -13.5, it remains in the negative range, indicating continued contraction in manufacturing activity. This index is a core indicator of the manufacturing climate in New York State, with negative values representing overall activity contraction.
The survey shows that the new orders index rose from -14.9 to -8.8, and the shipments index increased from -8.5 to -2.9. Although both have improved, they have not turned positive. The employment index only slightly rose to -2.6, indicating minimal change in employment conditions, while the average weekly hours fell to -9.1, reflecting still low capacity utilization.
Future Outlook Index Reaches Second Lowest Level in Nearly 24 Years
Compared to the current economic climate, businesses are even more pessimistic about the outlook for the next six months. The future overall business conditions index plummeted from 12.7 in March to -7.4 in April, the second lowest level since the September 11, 2001 terrorist attacks. According to the New York Fed, this level of pessimism has only appeared a few times in the survey's history.
The future outlook indices for new orders and shipments both hit record lows since the survey began, indicating that manufacturers generally expect future demand to decline further. Capital expenditure plans have stalled, reflecting a tendency for businesses to operate conservatively in uncertain environments.
Tariff Policies Increase Economic Uncertainty
This survey was conducted from April 2 to 9, during the first week after President Trump announced an expansion of trade tariffs on China. The New York Fed noted that the survey results show manufacturers' confidence in future performance rapidly deteriorated during this period.
According to estimates by Yale University's Budget Lab, the current effective tariff rate in the U.S. has reached 27%, the highest level since 1903. Although the Trump administration has temporarily exempted some electronic products like smartphones and computers, the overall policy remains uncertain. U.S. Commerce Secretary Wilbur Ross stated that these products may still be included in semiconductor tariffs, expected to be announced within 1 to 2 months.
This constantly changing policy environment makes it difficult for businesses to formulate long-term plans. The New York Fed pointed out that besides the impact of tariffs, businesses also feel uncertain about the outlook for U.S. tax and regulatory policies, leading some manufacturers to delay investments.
Price Pressures Rise Concurrently
The report also noted that price pressures significantly increased in April. The raw material price index rose from 44.9 in March to 50.8, the highest level since August 2022; the producer price index increased from 22.4 to 28.7, reaching a new high in over two years. This indicates that cost pressures faced by manufacturers are intensifying.
Although data from the U.S. Bureau of Labor Statistics (BLS) showed that the monthly increase rate of import prices (excluding oil) was zero in March, the industry generally believes that high tariffs will eventually be passed on to downstream product prices, further increasing inflationary pressures.
Survey Background and Methods
The "Empire State Manufacturing Survey" is a monthly questionnaire survey conducted by the New York Fed targeting about 200 senior executives in New York State's manufacturing sector, covering various indicators such as new orders, shipments, employment, and prices. The April survey sample consisted of about 100 responses, mainly completed between April 2 and 9.
