New York State factory activity in June at -16...Shrinks for fourth consecutive month

Orders and shipments dropped significantly due to tariff uncertainty

Outlook improves on hopes for trade negotiations

Factory activity in New York State contracted more than expected in June as orders and shipments declined, but the outlook improved.

On the 16th (local time), the Federal Reserve Bank of New York announced that the New York State General Business Conditions Index (GSI) fell by almost 7 points to minus 16, marking a fourth straight month of contraction. A negative index indicates economic contraction. This is worse than the minus 6 predicted by economists polled by Bloomberg.

However, the outlook for business conditions over the next six months jumped by more than 23 points. This is the highest level in five years since economic activity began to recover following the pandemic-induced lockdowns. Expectations for orders and shipments also rebounded sharply from May.

This survey, based on questionnaires, was conducted between June 2 and 9, just before and during trade negotiations between the United States and China.

Meanwhile, the materials price index fell by more than 12 points to 46.8, the largest drop in nearly two years. At the same time, the current price metric rose to its second-highest level since early 2023. Expectations for billing prices also increased.

The manufacturing sector is facing difficulties amid rising input prices and the uncertainty of trade policy. Producers are struggling as customers delay orders until tariff and tax uncertainties are resolved. As of June, new orders fell by more than 21 points to minus 14.2, and the shipments index stood at minus 7.2. Both indices hit their lowest levels in three months.

Byline: Kim Jeong-Ah, guest reporter kja@hankyung.com