New York State March Manufacturing Activity Index Plunges to -20... Tariff Effects Begin

Manufacturing Index Falls 26 Points, Price Indicators at Highest in 2 Years

"Policy Uncertainty Burdens Manufacturing Sector"

New York State's March manufacturing activity index has fallen to its lowest level since early 2024. Meanwhile, price indicators have risen. This aligns with expectations that growth would slow and price pressures would increase as tariffs are imposed.

On the 17th (local time), the New York Federal Reserve Bank's manufacturing index recorded minus 20, dropping about 26 points. Meanwhile, the prices paid indicator for manufacturers rose to 44.9, the highest in 2 years. Another prices received index also rose to its highest level since 2023, showing that tariff effects are gradually emerging.

The new orders indicator fell by more than 26 points, the largest drop since May 2023. Shipments also decreased sharply, and indicators for number of employees and weekly working hours contracted at a faster rate than the previous month.

Bloomberg News pointed out that the sharp retreat in New York factory activity suggests that policy uncertainty is putting pressure on the struggling manufacturing sector. It also predicted that the Trump administration's tariffs would first hit manufacturing and increasingly fuel inflation.

The New York Federal Reserve Bank's business outlook index fell to its lowest level since late 2023. Other forward-looking indicators, such as orders and employment, also declined, showing a drop in optimistic outlook.

Kim Jung-a, Contributing Writer kja@hankyung.com