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Economy in Brief

Empire State Manufacturing Index Continues to Strengthen
by Tom Moeller  June 15, 2018

The Empire State Manufacturing Index of General Business Conditions rose to 25.0 during June, the highest level in eight months. Expectations had been for 18.0 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 58.2, the highest level since March 2006. During the last ten years, the index has had a 69% correlation with the quarter-on-quarter change in real GDP.

Most of the components of the Empire State Survey improved this month. The new orders index rose to 21.3, the highest level since November. The shipments index similarly displayed strength with its rise to 23.5, the highest figure in six months. The unfilled orders measure also rose, but the delivery times series eased to 13.2 and indicated the quickest delivery speeds since February. The inventory index fell to a four-month low of 5.4.

The number of employees reading strengthened to 19.0, a six-month high. 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 24% of respondents reported a higher payroll level, 5% reported a lower hiring level. Working the other way, the employee workweek reading rose to 12.0, and was well above the recent low of 0.8 in January.

The prices paid index slipped to 52.7, but remained up sharply from its October 2015 low of 0.9. Fifty-four percent of respondents indicated increased prices, while just two percent reported a decline. The prices received index improved to 23.3 and also was near the highest level since 2011.

The series measuring expectations of business conditions in six months strengthened to 38.9 but remained down versus its February high of 50.5. Most of the expectation series improved m/m, except the price measures and capital & technology spending readings.

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 Jun May Apr Jun'17 2017 2016 2015
General Business Conditions (Diffusion Index, %, SA) 25.0 20.1 15.8 18.1 16.1 -2.6 -2.3
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 58.2 56.8 55.2 55.2 54.6 48.2 48.8
  New Orders 21.3 16.0 9.0 16.1 14.6 -0.8 -5.6
  Shipments 23.5 19.1 17.5 19.0 15.9 1.9 4.0
  Unfilled Orders 9.3 5.0 3.7 4.6 1.9 -8.8 -10.5
  Delivery Time 13.2 13.7 15.6 5.4 6.1 -4.8 -5.3
  Inventories 5.4 10.1 8.1 7.7 1.5 -9.6 -7.1
  Number of Employees 19.0 8.7 6.0 3.5 8.3 -5.1 2.3
  Average Employee Workweek 12.0 11.1 16.9 4.3 4.9 -5.2 -4.8
  Prices Paid 52.7 54.0 47.4 20.0 29.0 15.7 8.8
  Prices Received 23.3 23.0 20.7 10.8 11.0 0.7 1.2
Expectations 6 Months Ahead 38.9 31.1 18.3 41.4 42.6 29.0 30.3
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