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Economy in Brief

Empire State Business Activity Remains Strong
by Tom Moeller  September 15, 2017

The Empire State Manufacturing Index of General Business Conditions for September eased to 24.4 following its 15.4 point jump to 25.2 during August. The latest level was nearly the highest since September 2014 and continued to indicate expansion in factory sector activity. It exceeded expectations for 18.0 in the Action Economics Forecast Survey. 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 rose to 57.3, the highest level since May 2011. During the last ten years, the index posted a 63% correlation with the change in real GDP.

Most component series improved, including higher figures for shipments, new orders, inventories and delivery times. The workweek figure fell.

The employment index rose to its highest level since May. During the last ten years, there has been a 69% correlation between the employment index and the m/m change in factory sector payrolls. Twenty-three percent of respondents reported a higher payroll level while twelve percent reported a decline. The employee workweek reading reversed half of its August gain, but remained up sharply y/y.

The prices paid series increased to the highest level since March, but remained below its February high. Thirty-seven percent of respondents reported paying higher prices, while one percent reported them lower. The prices received index jumped to the highest level since February.

Expectations of business conditions six months ahead deteriorated m//m but remained up y/y. Movement in component series was mixed.

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 Sep Aug Jul Sep'16 2016 2015 2014
General Business Conditions (Diffusion Index, %, SA) 24.4 25.2 9.8 -1.2 -2.5 -2.3 11.9
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 57.3 54.1 53.5 45.4 48.2 48.9 52.4
  New Orders 24.9 20.6 13.3 -5.0 -0.7 -5.6 7.9
  Shipments 16.2 12.4 10.5 -8.1 1.8 4.0 12.1
  Unfilled Orders 8.9 -4.7 -4.7 -11.6 -8.8 -10.5 -9.0
  Delivery Time 14.6 5.4 4.7 -6.3 -4.8 -5.3 -5.2
  Inventories 6.5 -3.1 2.4 -12.5 -9.6 -7.1 -1.8
  Number of Employees 10.6 6.2 3.9 -14.3 -5.0 2.7 10.9
  Average Employee Workweek 5.7 10.9 0.0 11.6 -5.4 -5.3 1.4
  Prices Paid 35.8 31.0 21.3 17.0 15.7 8.8 20.9
Expectations 6 Months Ahead 39.3 45.2 34.9 33.0 29.0 30.3 40.2
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