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Economy in Brief

Empire State Manufacturing Index Continues Rising in March
by Tom Moeller  March 15, 2021

• Component changes are mixed.

• Employment measure indicates further growth.

• Prices surge.

The Empire State Manufacturing Index of General Business Conditions increased to 17.4 in March from 12.1 in February. A reading of 14.3 had been expected in the Action Economics Forecast Survey. An improved 34% of respondents expected business conditions to increase while a lessened 17% expected deterioration. The Empire State data, reported by the Federal Reserve Bank of New York, reflect business conditions in the manufacturing sector in New York, northern New Jersey and southern Connecticut. The data was collected between March 2 and March 9. The headline measure is constructed from the answer to a single question on business conditions

Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The ISM-adjusted Empire State Index rose to 55.9 in March from 54.2. It was up from an April 2020 low of 31.2.

Movement amongst the Empire State components remained mostly positive this month. The shipments measure surge to 21.l as 35% of respondents reported improvement, up from 29% in February. Unfilled orders rose sharply to the highest level since February 2020. The delivery times and inventory measures improved. Falling slightly to a still firm 9.1 was the new orders measure. Twenty-nine percent of respondents reported an increase in orders, compared to 24% twelve months earlier.

The employment index fell to 9.4, down from a recent high of 14.2 in December. A slightly higher 21% of respondents reported increased hiring while a greatly increased 11% reported a decline. The average workweek index rose to the highest level since October.

The prices paid index strengthened to 64.4 from 57.8, its highest level since May 2011, up from negative readings all through the first half of last year. A greatly increased 66% of respondents raised prices while only one percent reported lower prices. The prices received measure improved to 24.2, the highest level also since May 2011.

The series measuring expectations for business conditions in six months rose to 36.4 since September. It has been under pressure since the initial bounce-back in activity last summer.

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'20 2020 2019 2018
General Business Conditions (Diffusion Index, %, SA) 17.4 12.1 3.5 -21.5 -5.9 4.8 19.7
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 55.9 54.2 53.0 49.5 49.3 51.8 56.4
  New Orders 9.1 10.8 6.6 -9.3 -4.3 3.3 16.4
  Shipments 21.1 4.0 7.3 -1.7 -0.2 10.5 20.3
  Unfilled Orders 4.0 2.6 -5.5 1.4 -7.7 -6.0 3.5
  Delivery Time 11.4 9.1 5.5 2.2 2.7 -0.1 9.1
  Inventories 8.1 6.5 -0.7 5.8 -3.9 -0.9 5.9
  Number of Employees 9.4 12.1 11.2 -1.5 -1.2 5.4 12.3
  Average Employee Workweek 10.9 9.0 6.3 -10.6 -6.9 2.3 7.8
  Prices Paid 64.4 57.8 45.5 24.5 21.5 26.3 45.8
  Prices Received 24.2 23.4 15.2 10.1 4.8 10.3 19.3
Expectations 6 Months Ahead 36.4 34.9 31.9 1.2 29.7 23.9 35.2
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