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Economy in Brief

Empire State Factory Index Remains Positive
by Tom Moeller  March 18, 2013

The Federal Reserve Bank of New York reported that the Empire State Factory Index of General Business Conditions held above break-even in March, for the second consecutive month. The latest reading of 9.24 dipped from 10.04 in February but the two positive figures followed six consecutive readings below zero. The latest roughly matched Consensus expectations. Based on these figures, Haver Analytics calculates an index that is compatible to the ISM series. The adjusted figure fell to 51.2 but also continued to indicate positive growth. Since inception in 2001, the business conditions index has had a 65% correlation with the quarterly change in real GDP.

All of the index components deteriorated this month except the average workweek. Nevertheless, most of the other series suggest positive activity, notably the new orders, shipments and employment indexes. The employment series slipped but remained near its highest level in since September. During the last ten years there has been a 76% correlation between the jobs index and the m/m change in factory sector payrolls.

The prices paid reading slipped to 25.81 but remained near its highest level since May. Twenty nine percent of respondents reported paying higher prices while three percent paid less. During the last ten years there has been a 64% correlation between the index and the 3-month change in the intermediate goods PPI.

Looking ahead, the Empire State index of expected business conditions in six months improved further to 36.43, its highest level since April. Virtually all of the component index readings improved, notably shipments, prices paid, number of employees and technology spending..

The Empire State figures are diffusion indexes which are calculated by subtracting the percent of respondents reporting poorer business conditions from those reporting improvement. Thus, they have a good correlation with growth in the series covered. The data is available in Haver's SURVEYS database. The ISM-adjusted headline index is calculated by Haver Analytics. The series date back only to 2001. The Consensus expectation figure is in Haver's AS1REPNA database. 


Empire State Manufacturing Survey Mar Feb Jan Mar'12 2012 2011 2010
General Business Conditions (ISM Adjusted) 51.2 53.7 47.5 54.4 51.8 51.8 52.9
General Business Conditions (Diffusion Index, %) 9.24 10.04 -7.78 18.00 4.24 4.47 13.86
 New Orders 8.18 13.31 -7.18 6.55 1.38 4.04 9.96
 Shipments 7.76 13.08 -3.08 15.97 11.13 9.51 11.75
 Unfilled Orders -2.15 -2.02 -7.53 -1.23 -8.83 -5.29 -6.58
 Delivery Time -2.15 2.02 -2.15 7.41 -0.30 -0.91 -2.87
 Inventories -5.38 0.00 -8.60 0.00 -2.91 -1.80 -1.48
 Number of Employees 3.23 8.08 -4.30 13.58 8.62 6.68 14.29
 Prices Paid 25.81 26.26 22.58 50.62 24.71 40.66 29.63
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