The New York Empire State Manufacturing Index dropped to -8.1 in April, marking its third negative reading so far in 2025. While a single monthly dip might be shrugged off as volatility, this recurring weakness tells a more troubling story.
Historic Collapse in Business Outlook
According to the latest Empire State Manufacturing Survey, the 6-month outlook for general business conditions sank to -7.4, the lowest level since 2001. That’s right—manufacturers in New York haven’t been this pessimistic in 24 years.
For context, even during the 2008 financial crisis, future expectations never dipped this low. This signals a deeply entrenched anxiety among businesses that current challenges aren’t going away anytime soon.
New Orders Outlook: Lowest on Record
Perhaps the most dramatic figure from the survey: the 6-month outlook for new orders fell to -6.6, an all-time low in the history of the index.
This means manufacturers aren’t just worried about today—they’re seeing a demand collapse that could extend deep into the second half of the year. Such pessimism about future orders is a red flag for overall economic momentum.
Prices Paid Surge: Inflation Pressures Reignite
While demand and output expectations nosedive, prices paid are doing the opposite. The 6-month outlook for input prices spiked to 65.6, the highest since mid-2022.
This suggests businesses are bracing for sharp increases in raw material and input costs, even as demand drops. It’s a dangerous mix that points straight to stagflation—where inflation persists while growth stagnates or contracts.
Here are the key data points from the Empire State survey’s April 2025 release:
| Indicator | April 2025 Value | Notable Context |
|---|---|---|
| General Business Conditions (6mo) | -7.4 | Lowest since 2001 |
| New Orders Outlook (6mo) | -6.6 | Lowest in history |
| Prices Paid Outlook (6mo) | 65.6 | Highest since mid-2022 |
| Current Index (April) | -8.1 | 3rd negative reading in 2025 |
The combination of historic pessimism in outlooks and rising input costs is exactly what economists dread. This isn’t just weakness—it’s stagnation paired with inflation: stagflation.
If these trends persist, the Federal Reserve will face an impossible balancing act—taming inflation without crushing what little growth is left. And for manufacturers, the situation could get worse before it gets better.
Disclaimer:
The content of this article is for informational purposes only and should not be construed as financial or investment advice. The views expressed are based on publicly available data from the New York Federal Reserve’s Empire State Manufacturing Survey and are intended solely for general guidance.
