March 2014 Empire State Survey Slightly Improves, Internals Mixed

The Empire State Manufacturing Survey marginally improved and remains in expansion territory in March 2014. Key internals are mixed. This is a rather soft report for an economy in expansion.

 

 

• Expectations were for a reading between 0.0 and 8.5 (consensus 6.5) versus the +5.6 reported. Any value above zero shows expansion for the New York area manufacturers.
• New orders sub-index of the Empire State Manufacturing Survey improved marginally and now is marginally in expansion territory, whilst unfilled orders declined and still remains in contraction.
• This noisy index has moved from 9.2 (March 2013), 3.1 (April), -1.4 (May), 7.8 (June), 9.5 (July), 8.2 (August), 6.3 (September), 1.5 (October), -2.2 (November), +1.0 (December), +12.5 (January 2014), +4.5 (February) – and now +5.6.

As this index is very noisy, it is hard to understand what these massive moves up or down mean – however this regional manufacturing survey is normally one of the most pessimistic.

Econintersect reminds you that this is a survey (a quantification of opinion). Please see caveats at the end of this post. However, sometimes it is better not to look to deeply into the details of a noisy survey as just the overview is all you need to know.

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 sixmonth 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.