manufacturing activity in new york contracted in january at the steepest pace since mid2020 as increasing interest rates weighed on demand for goods data from the federal reserve bank of new york showed tuesday the empire state manufacturing surveys general business conditions index decreased to minus 329 in january from minus 112 in december its lowest reading since the onset of the covid19 pandemic in spring 2020 and well below the minus 7 consensus forecast from economists polled by the wall street journal the index which is based on a survey of manufacturing firms in the new york area suggests activity contracted sharply as the reading came in further below zero in january 44 of firms said business conditions worsened while 11 said conditions improved the new york fed said the decline in activity was driven mainly by rapidly waning demand according to the survey the new orders index fell sharply to minus 311 in january from minus 36 in december pointing to a steep decline in new orders the shipments index faced a similar fate declining to minus 224 from 53 a month earlier the index for number of employees also declined to 28 from 140 the lowest reading in more than two years and suggesting that job creation stalled over the month the delivery times index was broadly unchanged at 09 suggesting vendor lead times were stable in january unfilled orders continued to decline albeit at a softer pace than in december the data showed inflation pressures abated significantly at factory gates according to the survey the price paid index fell to 330 from 505 and the price received index decreased to 188 from 252 firms in the new york area expect little improvement in shortterm business conditions the index for future business conditions increased slightly to 80 from 63 with new orders and shipments expected to rise somewhat and employment increasing only modestly the report said