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Economy in Brief

Empire State Index Slipped
by Tom Moeller January 17, 2006

The January Empire State Index of General Business Conditions reversed all of the prior month's gain and fell 6.16 points to 20.12. Consensus expectations for the factory sector index had been for a lesser decline to 22. The figures reflect annual benchmark revision.

Since the series' inception in 2001 there has been a 76% correlation between the index level and the three month change in factory sector production.

Declines in inventories, delivery times and unfilled orders prompted the fall in the overall index. Otherwise, the component series increased. The shipments index rose to the highest level in over a year while the employment index reversed most of its December drop. The index of new orders was about unchanged and work hours rose to the highest level since October.

Pricing pressure remained about unchanged versus December and the levels remained down sharply from Fall peaks.

Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question; it is not a weighted combination of the components.

The index of expectations for business conditions in six months improved 3.5 points to the highest level since August. Expectations for future capital spending slipped slightly as they did in December but remained at a relatively high level.

The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.

Empire State Manufacturing Survey Jan Dec Jan '05 2005 2004 2003
General Business Conditions (diffusion index) 20.12 26.28 19.02 15.56 28.79 15.98
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