NY Manufacturing Surges to Four-Year High, but Price Pressures Flare — Evening Brief – 05.15.26
U.S. manufacturing showed fresh signs of life in May and April, with a sharp jump in New York factory activity and stronger-than-expected national industrial production, even as price pressures and supply frictions re-emerged.
The Empire State Manufacturing Index rose to 19.6 in May from 11.0 in April, handily beating the 7.8 consensus, according to the Federal Reserve Bank of New York. New orders climbed to 22.7, their highest level in more than four years, up from 19.3, while shipments held at an elevated 18.9 versus 20.2 previously. Inventories also firmed, with that index rising to 9.7 from 5.1.
“New York State manufacturing activity grew at its fastest pace in over four years in May,” said Richard Deitz, economic research advisor at the New York Fed. “New orders and shipments rose strongly, and employment continued to increase. However, the pace of price increases surged while delivery times and supply availability worsened.”
Price indicators pointed to renewed cost pressures. The prices paid index jumped to 62.6 from 51.0, and prices received rose to 31.8 from 21.8, signaling firms are both facing and passing through higher costs. The employment index remained positive at 8.3, down modestly from 9.8, while the survey noted increases in unfilled orders, longer delivery times, and worsening supply availability. Forward-looking sentiment improved as well: the index for future business conditions rose 14 points to 33.5, with more than half of respondents expecting conditions to improve over the next six months.
National data echoed regional strength. Industrial production increased 0.7% month over month in April, beating the 0.2% consensus and rebounding from March’s revised 0.3% decline. Manufacturing output rose 0.6%, with durable goods production up 1.2% and motor vehicles and parts jumping 3.7%. Nondurable output edged down 0.1%, as declines in chemicals and plastics and rubber products offset gains in food, beverage and tobacco, printing, and petroleum and coal products.
Capacity utilization reached 76.1%, above expectations and March’s 75.7% reading but still 3.3 percentage points below its long-run 1972–2025 average, according to the Federal Reserve.