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Economy in Brief

Empire State Factory Sector Activity Plummets to Lowest Point Since the Recession
by Tom Moeller  January 15, 2016

The Empire State Factory Index of General Business Conditions declined sharply during January to -19.37, the lowest level since March 2009. Expectations had been for -4.0 in the Action Economics Forecast Survey. The data are reported by the Federal Reserve of New York and reflect business conditions in New York, northern New Jersey and southern Connecticut.

Based on these figures, Haver Analytics calculates a seasonally adjusted index that is compatible to the ISM series. The adjusted figure fell to 45.6, the lowest level since June 2009. A rising level of activity is indicated by a figure above 50. Since inception in 2001, the business conditions index has had a 62% correlation with the change in real GDP.

The decline in the overall index was due to sharply lower readings for new orders and shipments. New orders fell to -23.54 and shipments declined to -14.39, both the lowest readings since March 2009. The delivery times index also declined to -13.00, indicating the fastest delivery speeds since December 2014. Modest improvement was evident in the other components. The employment index rose, but still was negative for the fifth consecutive month. Unfilled orders and inventories increased, but remained negative.

The prices paid index surged to its highest level since April. Twenty-two percent of respondents indicated an increase in prices while 5 percent paid less.

The expectations index for general business conditions also declined sharply to the lowest reading since the recession. Most component series fell sharply, notably new orders, shipments and employment.

The Empire State figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database. The ISM-adjusted headline index is calculated by Haver Analytics. The series dates back to 2001. The Action Economics figure can be found in Haver's AS1REPNA database.

Empire State Manufacturing Survey Jan Dec Nov Jan'15 2015 2014 2013
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 45.6 47.8 47.2 52.7 49.9 53.4 50.7
General Business Conditions (Diffusion Index, %, SA) -19.37 -6.21 -10.06 9.69 -2.34 11.89 3.88
 New Orders -23.54 -6.18 -11.75 5.53 -5.62 7.91 1.15
 Shipments -14.39 4.62 -3.03 10.17 3.97 12.09 4.55
 Unfilled Orders -11.00 -16.16 -18.18 -23.96 -10.52 -9.03 -8.74
 Delivery Time -13.00 -8.08 -10.91 -14.58 -5.32 -5.17 -3.52
 Inventories -6.00 -12.12 -17.27 -11.46 -7.06 -1.80 -5.73
 Number of Employees -13.00 -16.16 -7.27 8.33 2.72 10.85 3.73
 Prices Paid 16.00 4.04 4.55 10.42 8.84 20.90 21.53
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