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Economy in Brief

Empire State Factory Sector Activity Index Shows Positive Growth
by Tom Moeller  March 15, 2016

The Empire State Factory Index of General Business Conditions rebounded strongly this month. The New York index surged to 0.62 from -16.64 in February. It was the first positive reading since July. Expectations had been for -12.0 in the Action Economics Forecast Survey. The data are reported by the Federal Reserve Bank 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 rebounded to 51.1 from 47.4. It was above the break-even level of 50 for the first time since June. Since inception in 2001, the business conditions index has had a 65% correlation with the change in real GDP.

Improvement in the component series was mixed. Shipments surged to 13.88, the highest level since April of last year. New orders jumped to 9.57, above 50 for the first time since May, while unfilled orders improved to -3.96, the least negative reading in nearly two years. Elsewhere there was broad-based deterioration. Employment ticked lower to -1.98 from -0.99. During the last ten years there has been a 69% correlation between the index level and the m/m change in factory sector payrolls. Delivery times sped up and the index eased to -3.96, after surging in February. Inventories back-pedaled to -6.93 and showed continued decumulation.

The prices paid index remained at 2.97, its lowest point since October and down from the 2011 high of 69.89. Twelve percent of respondents paid higher prices while 9% paid less. The index of prices received eased to -5.94, also the lowest level since October.

The index of expectations for conditions in six months rebounded to 25.52, the highest level in three months. Strength in new orders, shipments & inventories led the improvement. Expected prices remained depressed.

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 Mar Feb Jan Mar'15 2015 2014 2013
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 51.1 47.4 43.0 51.9 48.9 52.4 50.0
General Business Conditions (Diffusion Index, %, SA) 0.62 -16.64 -19.37 6.22 -2.34 11.89 3.88
 New Orders 9.57 -11.63 -23.54 -1.42 -5.62 7.91 1.15
 Shipments 13.88 -11.56 -14.39 8.66 3.97 12.09 4.55
 Unfilled Orders -3.96 -6.93 -11.00 -13.40 -10.52 -9.03 -8.74
 Delivery Time -3.96 -1.98 -13.00 -2.06 -5.32 -5.17 -3.52
 Inventories -6.93 0.00 -6.00 -5.15 -7.06 -1.80 -5.73
 Number of Employees -1.98 -0.99 -13.00 18.56 2.72 10.85 3.73
 Prices Paid 2.97 2.97 16.00 12.37 8.84 20.90 21.53
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