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Economy in Brief

Empire State Index Surged
by Tom Moeller March 15, 2006

The Empire State Index of General Business Conditions for March, published by the Federal Reserve Bank of New York, surged to 31.16 from a revised 21.02 last month. Consensus expectations for the factory sector index had been for a decline to 18.8.

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.

Most of the index components improved in March. The employment index jumped to 21.75, the highest level since the middle of last year while the shipments index similarly surged. New orders also improved and the inventory index jumped to the highest level since late 2001.

Pricing pressure eased, indicated by sharp drop in the index to the lowest level since last August.

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 rose very slightly m/m and expectations for future capital spending fell.

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 Mar Feb Mar '05 2005 2004 2003
General Business Conditions (diffusion index) 31.16 21.02 19.30 15.56 28.79 15.98
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