U.S. Data Pulse: Empire Manufacturing: Strong Demand, Cooling Prices

Research evidence excerpt

U.S. Data Pulse: Empire Manufacturing: Strong Demand, Cooling Prices

UpdateM

Empire Manufacturing Signals Solid Momentum

Manufacturing activity accelerated strongly in July, according to the Empire State

Manufacturing Survey. The headline business conditions index rose 9.9 points to 15.6 in

July, well above its 6-month average.

Demand and production continued to show strength and resilience. The shipments index

increased 15.8 points to 24.4, remaining firmly positive and extending the strength seen in

the prior month. The new orders index rose 18.7 points to 22.2, a sharp increase after the

moderation in June. Both indices have remained strong for four consecutive months.

Labor demand from manufacturers remained in expansion territory. The index for number

of employees increased to 11.4, marking the sixth consecutive month of expansion. The

average workweek index fell to 2.8, although it remained in expansion territory.

Supply chain & inventories: Delivery times continued to lengthen for a sixth consecutive

month, at a modestly faster pace than in June. The delivery time index moved up to 13

from 11.9, staying between its average of 14.8 and 5.9 in 2Q26 and 1Q26. Inventories

increased to 4 after a flat month in June.

Prices: Both prices received and prices paid decelerated for a second consecutive month,

reflecting lower energy prices and confirming our view of the near-complete tariff

passthrough. The prices paid index fell 8.7 points to 52.3, marking the second month of

deceleration since the start of the Iran conflict. It still reflects ongoing pressure from

elevated energy prices, but the continued deceleration is a positive signal. The prices

received index also decreased to 27.6, down 3.8 points from its June reading, suggesting