02:42 PM EDT, 07/15/2024 (MT Newswires) -- New York manufacturing activity contacted less than expected this month as orders largely held steady, while expectations cooled, the Federal Reserve Bank of New York said Monday.

The Empire State Manufacturing Survey's general business conditions index dipped to minus 6.6 in July from minus 6 in June. The consensus was for a bigger decline to minus 8 in a survey compiled by Bloomberg.

"Manufacturing conditions remained somewhat sluggish in New York State in July, though orders held steady and shipments edged slightly higher," said Richard Deitz, economic research advisor at the New York Fed. "Employment continued to contract, and capital spending plans were weak."

New orders edged up 0.4 points to minus 0.6, suggesting the gauge for demand was flat, the Fed branch said. Shipments ticked up 0.6 point to 3.9. Survey responses were collected between July 2 and July 10.

The component measuring number of employees improved 0.8 point to minus 7.9. "Labor market conditions remained weak, with employment continuing to contract," the Fed branch wrote.

The raw material cost index increased to 26.5 in July from 24.5 last month, while selling prices cooled to 6.1 from 7.1, the survey showed. Firms expect both metrics to accelerate over the next half year.

Six months out, the index for general business conditions decreased 4.3 points to 25.8 this month, the report showed. Still, firms were "fairly optimistic that conditions would improve in the months ahead," Deitz said.

The index measuring future new orders declined 9.2 points to 20.8, while future shipments slid 3.4 points to 25.3. Expectations about the labor market fell but remained positive at the employee level. At 5.8, the outlook for employment growth remained weak, according to the survey.