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Economy in Brief

Empire State Manufacturing Index Improves
by Tom Moeller  May 15, 2018

The Empire State Manufacturing Index of General Business Conditions rose to 20.1 during May and made up most of its April decline. Expectations had been for 15.0 in the Action Economics Forecast Survey. These data, reported by the Federal Reserve Bank of New York, reflect business conditions in New York, northern New Jersey and southern Connecticut.

Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The calculated figure increased to 56.8 from 55.6. During the last ten years, the index had a 69% correlation with the quarter-on-quarter change in real GDP.

Most of the series in the Empire State Survey improved in May. The new orders index rose to 16.0 from 9.0, but remained below the September high of 24.4. The shipments index displayed a similar pattern of movement with its rise to 19.1 from 17.5. The delivery times index eased to 13.7 from 15.6, but still indicated nearly the slowest product delivery speeds of the recovery. The inventory index rose to 10.1, the highest level in four months.

The number of employees reading rose to 8.7 from 6.0, but was well below the December high of 22.9. During the last ten years, there has been a 77% correlation between the employment index and the month-on-month change in factory sector payrolls. While 18% of respondents reported a higher payroll level, 10% reported a lower hiring level. Working the other way, the employee workweek reading declined to 11.1, but remained well above the December 2015 low of -17.3.

The prices paid index strengthened to 54.0, its highest level since June 2011. Fifty-six percent of respondents indicated increased prices, while just two percent reported a decline. The prices received rose slightly to 23.0 and also was near the highest level since 2011.

The series measuring expectations of business conditions in six months reversed some of its drastic April decline with a rise to 31.1. Most of the expectation series improved somewhat, but remained below the 2017 highs.

The Empire State figures are diffusion indexes, which are calculated by subtracting the percent of respondents reporting declines from those reporting gains. The data are available in Haver's SURVEYS database. The ISM-adjusted headline index dates back to 2001. The Action Economics Forecasts can be found in Haver's AS1REPNA database.

Empire State Manufacturing Survey May Apr Mar May'17 2017 2016 2015
General Business Conditions (Diffusion Index, %, SA) 20.1 15.8 22.5 3.0 16.1 -2.6 -2.3
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 56.8 55.6 57.5 52.1 54.6 48.2 48.8
  New Orders 16.0 9.0 16.8 -1.9 14.6 -0.8 -5.6
  Shipments 19.1 17.5 27.0 10.8 15.9 1.9 4.0
  Unfilled Orders 5.0 3.7 12.7 -3.7 1.9 -8.8 -10.5
  Delivery Time 13.7 15.6 16.2 6.7 6.1 -4.8 -5.3
  Inventories 10.1 8.1 5.6 -0.7 1.5 -9.6 -7.1
  Number of Employees 8.7 6.0 9.4 5.7 8.3 -5.1 2.3
  Average Employee Workweek 11.1 16.9 5.9 8.1 4.9 -5.2 -4.8
  Prices Paid 54.0 47.4 50.3 20.9 29.0 15.7 8.8
  Prices Received 23.0 20.7 22.4 4.5 11.0 0.7 1.2
Expectations 6 Months Ahead 31.1 18.3 44.1 39.8 42.6 29.0 30.3
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