- Manufacturing production contracted for the second straight month, declining 0.5% in both May and June. As such, the solid gains in output seen in the spring have waned, with growth stalling in the summer. Manufacturers continue to be challenged by supply chain bottlenecks, workforce shortages and soaring production costs.
- With that said, manufacturing activity has proven to be quite resilient over the course of the past year, and while manufacturing production has pulled back for two consecutive months, it has risen 3.6% over the past 12 months. In addition, manufacturing capacity utilization has slipped from 80.3% in April, the highest since April 2007, to 79.8% in May to 79.3% in June, but it remains elevated.
- Manufacturing activity expanded for just the third time this year in the Empire State survey. Input prices decelerated, remaining elevated but at the slowest pace since February 2021. Yet, manufacturers in the region felt pessimistic in their outlook for the next six months, with the forward-looking composite index notching the first negative reading since February 2009.
- Manufacturers cite rising raw materials costs as their top challenge, followed closely by supply chain and workforce challenges, with the very significant pace of price growth in this data over the past year helping to explain why.
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