(RTTNews) - Manufacturing activity in New York State continued to deteriorate in June, according to a report released by the Federal Reserve Bank of New York on Monday, with the index of activity in the sector showing an unexpected decline.

The general business conditions index fell to a negative 8.7 in June from a negative 3.2 in May, with a negative reading indicating a contraction in activity in the sector. Economists had expected the index to edge up to a reading of negative 2.0.

A turnaround in shipments contributed to the continued weakness in the sector, with the shipments index falling to a negative 6.5 in June from a positive 4.6 in May. With the decrease, the index fell to its lowest reading since a negative 10.9 in October of 2001.

Continued weakness in new orders also had a negative impact, as the new orders index fell to a negative 5.5 in June from a negative 0.5 in May. The index indicated the fastest contraction in new orders since February.

At the same time, the report showed a modest increase in the pace of employment growth, with the number of employees index edging up to 1.16 in June from 1.09 in May.

The report also showed that the pace of price growth remained at an elevated level. While the prices paid index slipped to 66.3 in June from a record high of 69.6 in May, the prices received index jumped to 26.7 from 15.2 in the previous month.

Looking ahead, the future indexes remained subdued, although they generally improved from May levels. The future general business conditions index rose to 32.2 in June from 23.9 in May, with 47 percent of respondents expecting conditions to improve over the next six months.

Later this week, the Philadelphia Federal Reserve will also release its regional manufacturing report, with economists expecting the index of activity in the sector to narrow to a negative 10.0 in June from a negative 15.6 in May.

The reports are likely to have an impact on the outlook for the national manufacturing report released by the Institute for Supply Management. Earlier this month, the ISM manufacturing report showed that activity contracted for the fourth consecutive month in May.

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Posted in Categories: Economy, Forex, Releases, USA.

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