Manufacturers in New York State reported a sharp pickup in October, according to the Empire State Manufacturing Survey, published on Thursday by the Federal Reserve Bank of New York. The general business conditions index rose 18 points to 25.5, its highest reading since December 2021. The New York Fed said in its overview that "business activity rose sharply in New York State in October."
The headline is good. The detail underneath is mixed, and it is the detail that matters for what comes next.
What rose
New orders rose 21 points to 23.2 and shipments rose 16 points to 13.1, the New York Fed said. Unfilled orders rose 8 points to 14.0. In this survey, an index above zero means more firms reported an increase than a decrease, so these are net shares of respondents, not growth rates. Responses were collected between 2 and 9 October.
Inventories increased, according to the survey.
What got harder
The same respondents reported that inputs are scarcer and slower. The supply availability index fell 3 points to minus 15.1, its lowest level since June 2022, the New York Fed said. The delivery times index was 19.8, which the bank said pointed to significantly longer delivery times.
That combination, rising orders and falling supply, is the usual setup for price pressure. The prices paid index fell 4 points to 59.5, which the bank said was down from a four-year high. The prices received index rose 3 points to 30.6. Both future price indexes climbed further from already elevated levels, the bank said, suggesting that expectations of price increases have become more widespread.
That fits Thursday's producer price report, in which the Bureau of Labor Statistics said final demand rose 1.3 per cent in September and 6.3 per cent over 12 months. Our reading is that the survey shows the same pressure from the buying side: firms pay more, and they are only starting to charge more. The prices received index at 30.6 is about half the prices paid index at 59.5, by this publication's arithmetic. The two are diffusion indexes, not dollar amounts, so the comparison shows direction and breadth, not margins.
>>Firms pay more, and they are only starting to charge more.
Hiring is modest
The employment index held steady at 10.3, and the average workweek index was 9.1, according to the bank, which described that as ongoing modest growth in employment and an increase in hours worked. Orders jumped by 21 points; the employment index did not move. Our reading is that firms are meeting the new orders first with longer hours, but that is inference, not something the survey says.
Reading it with care
Future business conditions fell 8 points to 21.0, the bank said. Firms still expect improvement, but optimism moderated, and they expect supply availability to worsen. A survey of New York State firms is also one regional read, and a diffusion index measures how many firms report a change, not how large it is.
The test is the November reading and the hard data behind it. If the order surge is real, shipments should follow it and the delivery-time index should ease. If supply stays scarce and prices paid stays near 60, the factory sector is expanding in a way that raises costs rather than margins.
Sources
- Federal Reserve Bank of New York, Empire State Manufacturing Survey, October 2026
- Federal Reserve Bank of New York, Empire State Manufacturing Survey report, October 2026 (PDF)
- BLS, Producer Price Index News Release, September 2026
All index values and descriptions come from the Federal Reserve Bank of New York's October 2026 Empire State Manufacturing Survey, released 15 October 2026, with responses collected 2 to 9 October, as published in the bank's survey overview and October report. The comparison with the producer price report is from the BLS PPI release of 15 October. The framing is this publication's. The analysis is our own.
Topics businessmanufacturingsupply chain
