manufacturing activity in new york state went back into contraction territory in may after ticking back toward expansion last month resuming a streak of persistent weakness in the regions factory sector data from the federal reserve bank of new york showed monday the empire state manufacturing surveys general business conditions index fell sharply to minus 318 in may from 108 in april economists polled by the wall street journal had been expecting minus 5 the index signals that activity at manufacturers contracted more heavily than expected in may coming well below the zero threshold that separates expansion from contraction the pace of contraction was on par with the minus 329 seen in january which was the worst month performance since the onset of the covid19 pandemic around 49 of the firms surveyed said conditions worsened in may compared with the previous month while 17 said conditions improved the new york fed said new orders and shipments plunged after a significant rise last month while inventories contracted and delivery times shortened somewhat the new orders index sank to minus 28 from 251 last month indicating that demand is back on the decline while shipments dropped to minus 164 from 239 in april employment levels had their fourthconsecutive monthly negative reading as manufacturers continue to shed jobs albeit at a slightly softer pace with the number of employees index improving slightly to minus 35 from minus 8 a month ago inflation pressures at factory gates were relatively unchanged from last month with the prices paid index ticking up to 349 from 33 and the price received index holding steady at 236 after hitting 237 in april firms in the area dont expect activity to improve significantly over the next six months though the index for future business conditions did edge up to 98 from 66 in april new orders and shipments are still expected to increase in the short term while employment is expected to edge higher the new york fed said