April 2014 Empire State Survey Declines, Internals Not Good

 

The Empire State Manufacturing Survey declined but remains in expansion territory in April 2014. Key internals are contracting. Again,this is a rather soft report for an economy in expansion.

• Expectations were for a reading between 3.5 and 10.0 (consensus 7.5) versus the +1.3 reported. Any value above zero shows expansion for the New York area manufacturers.
• New orders sub-index of the Empire State Manufacturing Survey is in contraction territory, whilst unfilled orders improved but still remains in contraction.
• This noisy index has moved from 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), +5.6 (March) – and now +1.3.

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 April 2014 Empire State Manufacturing Survey indicates that business activity was flat for New York manufacturers. The headline general business conditions index slipped four points to 1.3. The new orders index fell below zero to -2.8, pointing to a slight decline in orders, and the shipments index was little changed at 3.2. The unfilled orders index remained negative at -13.3, and the inventories index dropped ten points to -3.1. The prices paid index held steady at 22.5, indicating continued moderate input price increases, and the prices received index rose to 10.2, pointing to a pickup in selling price increases. Employment indexes showed a modest rise in employment levels and a slight increase in the average workweek. Indexes for the six-month outlook continued to convey a good deal of optimism about future conditions, and the capital expenditures index climbed seven points to 23.5, its highest level in several months.