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Economy in Brief

Empire State Business Conditions Survey Eases
by Tom Moeller  March 15, 2017

The Empire State Manufacturing Index of General Business Conditions for March fell to 16.4 from 18.7 in February. The Action Economics Forecast Survey expected 15.2. These data, reported by the Federal Reserve Bank of New York, reflect business conditions in New York, northern New Jersey and southern Connecticut.

Based on these figures, Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The adjusted figure improved to 54.9 from 54.4. It was the highest level since May 2012. During the last ten years, the index posted a 63% correlation with the change in real GDP.

Performance amongst the index components was mixed this month. New orders eased, but shipments increased. Unfilled orders and delivery times also rose, but inventories fell. The employment index jumped to 8.8, its highest level since April 2015. During the last ten years, there has been a 69% correlation between the employment index and the m/m change in factory sector payrolls. The average workweek reading also surged to the highest point since March 2012.

The prices paid series eased to 31.0, but remained up sharply versus the readings of 2016 and 2015. A lessened 33.6% of respondents reported paying higher prices, while a reduced 2.7% reported them lower. The prices received index similarly declined to 8.8, its lowest point in three months.

Expectations of business conditions six months ahead fell sharply to 37.4, its lowest point since November. The index was pulled lower by weakened readings for orders, shipments and employment. An earlier decline in expected prices stabilized.

The Empire State figures are diffusion indexes, which are calculated by subtracting the percent of respondents reporting declines from those reporting gains. The data are available in Haver's SURVEYS database. The ISM-adjusted headline index dates back to 2001. The Action Economics Forecasts can be found in Haver's AS1REPNA database.

Empire State Manufacturing Survey Mar Feb Jan Mar'16 2016 2015 2014
General Business Conditions (Diffusion Index, %, SA) 16.4 18.7 6.5 -1.5 -2.5 -2.3 11.9
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 54.9 54.4 50.9 50.4 48.2 48.9 52.4
  New Orders 21.3 13.5 3.1 -9.7 -0.7 -5.6 7.9
  Shipments 11.3 18.2 7.3 10.3 1.8 4.0 12.1
  Unfilled Orders 14.2 8.2 -1.7 -4.0 -8.8 -10.5 -9.0
  Delivery Time 10.6 7.1 -2.5 -4.0 -4.8 -5.3 -5.2
  Inventories -2.7 3.1 2.5 6.9 -9.6 -7.1 -1.8
  Number of Employees 8.8 2.0 -1.7 -2.0 -5.0 2.7 10.9
  Average Employee Workweek 15.0 4.1 -4.2 2.0 -5.4 -5.3 1.4s
  Prices Paid 31.0 37.8 36.1 3.0 15.7 8.8 20.9
Expectations 6 Months Ahead 37.4 41.7 49.7 25.3 29.0 30.3 40.2
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