"The biggest challenge for manufacturing is lack of confidence due to uncertainty in fiscal policy"
- Tom Simons, an economist at Jefferies Group Inc. in New York
Manufacturing activity in the New York region shrank for a fifth consecutive month, as new orders dropped and the labour market remained weak, the New York Federal Reserve said in a report on Monday. The general business conditions index fell to -8.1, down from -5.2 the month before, while analysts' had predicted a reading of -1.0. Any reading below 0.0 indicates contraction in New York, northern New Jersey and southern Connecticut, while any reading above shows expansion. In the meantime, the gauge, which measures the number of new orders, tumbled to -3.7 from 3.1, while inventories were at -11.8 from -12.4.
"The biggest challenge for manufacturing is lack of confidence due to uncertainty in fiscal policy," said Tom Simons, an economist at Jefferies Group Inc. in New York, who projected a reading of minus 5 for the gauge. "That is slowing down activity. There are reasons for manufacturing to come back but it's going to be a couple of months before we start to see the acceleration."
"Global growth concerns have combined with slowing business confidence due to the fiscal cliff to stifle the [factory] sector, which had been a leader in the economic recovery since the early days," said Thomas Simons, economist with Jefferies & Co.
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