Global| Apr 15 2021U.S. Empire State Manufacturing Index Reaches a Multi-Year High in April
Summary
• Strong gains are reported for all components. • Prices paid and prices received surged in April. The Empire State Manufacturing Index of General Business Conditions jumped 9 points to 26.3, up from 17.4 in March, and well surpassing [...]
• Strong gains are reported for all components.
• Prices paid and prices received surged in April.
The Empire State Manufacturing Index of General Business Conditions jumped 9 points to 26.3, up from 17.4 in March, and well surpassing the reading of 19 expected in the Action Economics Forecast Survey. 39% of the respondents reported improved conditions over the month, while only 12% reported that conditions had worsened, down from 17% last month.
The Empire State data, reported by the Federal Reserve Bank of New York, reflect business conditions in the manufacturing sector in New York, northern New Jersey and southern Connecticut. The data was collected between April 2 and April 9. The headline measure is constructed from the answer to a single question on business conditions. Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The ISM-adjusted Empire State Index rose to 60.5 in April from 55.9 in March and from the low of 31.2 in April 2020.
All the Empire State components rose measurably in April.
Strong gains in orders and shipments pushed the new orders component to 26.9 in April from 9.1 in March, and the shipments measure to 25 from 21.1 in March. Unfilled orders surged to 21.2 from 4 in March, while the delivery time jumped to 28.1 from 11.4, pointing to significantly longer delivery times. Inventories were also up, reaching 11.6 up from 8.1 in March. The index for the number of employees jumped to 13.9 from 9.4 in March, with 21% of respondents reporting increased hiring, similar to March's reporting, while 7% reported lower hiring compared to 11% in March. The average workweek rose to 12.7, up from 10.9 in March.
Prices paid rose 10.3 points to 74.7 from 64.4 in March and its highest level since 2008, underscoring sharp input price increases. 75% of the respondents cited higher prices paid. The prices received measure rose 11 points, to 34.9, a record high. The New York Fed reported that selling prices rose at their fasted pace in more than 20 years. The index of business conditions in six months moved to 39.8 in April from 36.4 in March, underscoring optimism in months ahead.
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 | Apr | Mar | Feb | Apr'20 | 2020 | 2019 | 2018 |
|---|---|---|---|---|---|---|---|
| General Business Conditions (Diffusion Index, %, SA) | 26.3 | 17.4 | 12.1 | -78.2 | -5.9 | 4.8 | 19.7 |
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 60.5 | 55.9 | 54.2 | 31.2 | 49.3 | 51.8 | 56.4 |
| New Orders | 26.9 | 9.1 | 10.8 | -66.3 | -4.3 | 3.3 | 16.4 |
| Shipments | 25.0 | 21.1 | 4.0 | -68.1 | -0.2 | 10.5 | 20.3 |
| Unfilled Orders | 21.2 | 4.0 | 2.6 | -16.8 | -7.7 | -6.0 | 3.5 |
| Delivery Time | 28.1 | 11.4 | 9.1 | 11.0 | 2.7 | -0.1 | 9.1 |
| Inventories | 11.6 | 8.1 | 6.5 | -9.7 | -3.9 | -0.9 | 5.9 |
| Number of Employees | 13.9 | 9.4 | 12.1 | -55.3 | -1.2 | 5.4 | 12.3 |
| Average Employee Workweek | 12.7 | 10.9 | 9.0 | -61.6 | -6.9 | 2.3 | 7.8 |
| Prices Paid | 74.7 | 64.4 | 57.8 | 5.8 | 21.5 | 26.3 | 45.8 |
| Prices Received | 34.9 | 24.2 | 23.4 | -8.4 | 4.8 | 10.3 | 19.3 |
| Expectations 6 Months Ahead | 39.8 | 36.4 | 34.9 | 7.0 | 29.7 | 23.9 | 35.2 |
Kathleen Stephansen, CBE
AuthorMore in Author Profile »Kathleen Stephansen is a Senior Economist for Haver Analytics and an Independent Trustee for the EQAT/VIP/1290 Trust Funds, encompassing the US mutual funds sponsored by the Equitable Life Insurance Company. She is a former Chief Economist of Huawei Technologies USA, Senior Economic Advisor to the Boston Consulting Group, Chief Economist of the American International Group (AIG) and AIG Asset Management’s Senior Strategist and Global Head of Sovereign Research. Prior to joining AIG in 2010, Kathleen held various positions as Chief Economist or Head of Global Research at Aladdin Capital Holdings, Credit Suisse and Donaldson, Lufkin and Jenrette Securities Corporation.
Kathleen serves on the boards of the Global Interdependence Center (GIC), as Vice-Chair of the GIC College of Central Bankers, is the Treasurer for Economists for Peace and Security (EPS) and is a former board member of the National Association of Business Economics (NABE). She is a member of Chatham House and the Economic Club of New York. She holds an undergraduate degree in economics from the Universite Catholique de Louvain and graduate degrees in economics from the University of New Hampshire (MA) and the London School of Economics (PhD abd).
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