This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions showed improvement, posting a reading of 5.6, up from 4.5 last month. TheInvesting.com forecast was for a slightly higher 6.0. The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.
Here is the opening paragraph from the report.
| The March 2014 Empire State Manufacturing Survey indicates that business conditions continued to improve for New York manufacturers, though activity grew slowly. At 5.6, the general business conditions index was little changed from last month. The new orders index climbed three points to 3.1, indicating that orders were slightly higher, and the shipments index inched up to 4.0. The unfilled orders index fell further into negative territory, declining ten points to -16.5, and the inventories index advanced to 7.1, pointing to rising inventory levels. The indexes for both prices paid and prices received declined but remained positive, indicating slower price growth. Employment indexes were positive and suggested a small increase in employment levels and hours worked. Indexes for the six-month outlook were down somewhat from last month’s levels, but continued to convey a fairly strong degree of optimism about future conditions, and the capital spending index rose to its highest level in several months. |
Here is a chart illustrating both the General Business Conditions and Future General Business Conditions (the outlook six months ahead):
Click this link to access a PDF set of charts of the individual components over the past 12 months.
Since this survey only goes back to July of 2001, we only have one complete business cycle with which to evaluate its usefulness as an indicator for the broader economy. Following the Great Recession, the index has slipped into contraction multiple times, as the general trend slowed. It has remained in a relatively narrow range over the past year, with last month as the interim high.
