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Economy in Brief

U.S. Empire State Manufacturing Activity Improved in November
by Tom Moeller  November 15, 2021

• Activity recovered most of October decline.

• Pricing power firms again.

• Expectations weaken.

The Empire State Manufacturing Index of General Business Conditions rose to 30.9 in November after falling to 19.8 during October. A reading of 20.8 had been expected in the Action Economics Forecast Survey. An increased 43.0% of respondents reported improved business conditions, up from 39.4% last month, while 12.1% reported that conditions had worsened, down from 19.5% in October. The latest survey was conducted between November 2 and November 9.

Haver Analytics constructs an ISM-adjusted Empire State diffusion index using methodology similar to the ISM series. The latest reading rose to 62.5, making up most of the decline to 60.0 in October. A reading above 50 signifies positive growth.

Movements amongst the component series were mixed this month. The new orders measure rose to 28.8 from 24.3 in October. The shipments reading improved to 28.2 from 8.9. The delivery time index declined to 32.2 from 38.0. A lessened 38.1% of respondents reported faster delivery speeds while a little-changed 5.9% reported slower order fulfillment. The unfilled orders series fell to 12.7 from 18.5 in October. Inventories fell in November to 9.3 from 12.0 last month.

The number of employees index rose to 26.0 in November after falling to 17.1 in October. It was a record high for the series which dates back to July 2001. An increased 29.2% of respondents reported more hiring while a lessened 3.2% reported less hiring. The average workweek reading rose to 23.1 this month and made up most of last month's decline.

The prices paid index rose to 83.0 in November from 78.7 in October. The record was 83.5 in May. A higher 83.1% of respondents indicated higher prices while none paid less. The prices received measure increased to a record 50.8 in November.

The index of business conditions in six months fell sharply this month to 36.9 from 52.0 in October. It was the lowest reading in six months. Expectations for new orders, shipments and employment fell while prices paid, unfilled orders and delivery times rose. Expectations for capital spending as well as technology spending rose slightly.

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 headline measure is constructed from the answer to a single question on business conditions. 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 Nov Oct Sep Nov'20 2020 2019 2018
General Business Conditions (Diffusion Index, %, SA) 30.9 19.8 34.3 6.3 -5.9 4.8 19.7
General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) 62.5 60.0 62.9 51.2 49.3 51.8 56.4
  New Orders 28.8 24.3 33.7 3.7 -4.3 3.3 16.4
  Shipments 28.2 8.9 26.9 6.3 -0.2 10.5 20.3
  Unfilled Orders 12.7 18.5 20.9 -11.9 -7.7 -6.0 3.5
  Delivery Time 32.2 38.0 36.5 0.7 2.7 -0.1 9.1
  Inventories 9.3 12.0 11.3 -8.6 -3.9 -0.9 5.9
  Number of Employees 26.0 17.1 20.5 9.4 -1.2 5.4 12.3
  Average Employee Workweek 23.1 15.3 24.3 4.8 -6.9 2.3 7.8
  Prices Paid 83.0 78.7 75.7 29.1 21.5 26.3 45.8
  Prices Received 50.8 43.5 47.8 11.3 4.8 10.3 19.3
Expectations 6 Months Ahead 36.9 52.0 48.4 33.9 29.7 23.9 35.2
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