Empire State Manufacturing Drops 8 Points,
But Remains Positive
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions disappointed expectations, posting a reading of 4.48, down from 12.51 last month. The Investing.com forecast was for 9.0. The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.
Here is the opening paragraph from the report.
|The February 2014 Empire State Manufacturing Survey indicates that business conditions improved marginally for New York manufacturers. The general business conditions index fell eight points, but remained positive at 4.5. The new orders index fell to about zero, indicating that orders were flat, and the shipments index declined thirteen points to 2.1. The unfilled orders index remained negative at -6.3. The prices paid index fell twelve points to 25.0, pointing to a slowing pace of input price increases, while the prices received index climbed two points to 15.0, suggesting a faster pace of selling price increases. Employment indexes were little changed, indicating a modest increase in employment levels and slightly longer workweeks. Indexes for the six-month outlook continued to convey fairly robust optimism about future conditions, even as the capital spending index fell ten points to 2.5, a multiyear low.|
Here is a chart illustrating both the General Business Conditions and Future General Business Conditions (the outlook six months ahead):
Click this link to access a PDF set of charts of the individual components over the past 12 months.
Since this survey only goes back to July of 2001, we only have one complete business cycle with which to evaluate its usefulness as an indicator for the broader economy. Following the Great Recession, the index has slipped into contraction multiple times, as the general trend slowed. It has remained in a relatively narrow range over the past year, with last month as the interim high.
Meanwhile, here's another look at the latest ISM Manufacturing Business Activity Index.
I'll keep a close eye on some of the regional manufacturing indicators in the months ahead.