Global| Sep 15 2015Empire State Factory Sector Activity Decreases For Second Consecutive Month
by:Tom Moeller
|in:Economy in Brief
Summary
The Empire State Factory Index of General Business Conditions remained negative during September, nearly the weakest reading since the recession. The latest figure of -14.67 compared to an unrevised -14.92 in August. These diffusion [...]
The Empire State Factory Index of General Business Conditions remained negative during September, nearly the weakest reading since the recession. The latest figure of -14.67 compared to an unrevised -14.92 in August. These diffusion indexes were the lowest since April 2009. The latest disappointed expectations for -3.0 in the Action Economics Forecast Survey. The data are reported by the Federal Reserve of New York and reflect conditions in New York, northern New Jersey and southern Connecticut.
Based on these figures, Haver Analytics calculates a seasonally adjusted index that is compatible to the ISM series. The adjusted figure eased to 44.9, also a six-year low. A rising level of activity is indicated by a figure above 50. Since inception in 2001, the business conditions index has had a 62% correlation with the change in real GDP.
Each of the component series were negative this month. The employment figure entered negative territory for the first time since January 2013. During the last ten years, there has been a 72% correlation between the employment series and the m/m change in factory sector payrolls. New orders and shipments also were close to the lowest levels since 2009, while vendor delivery speeds quickened to the fastest pace this year.
The prices paid index eased to 4.12, the lowest point since June 2009. Eighteen percent of respondents reported higher prices but a sharply increased 13 percent paid less, the most since June 2009. Prices received fell into negative territory, also for the first time since 2009.
Expectations for business conditions also deteriorated to the lowest positive level since January 2013. A sharply reduced 39.6% of respondents expected improvement. Each of the component series deteriorated m/m.
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 dates back to 2001. The Action Economics figure can be found in Haver's AS1REPNA database.
| Empire State Manufacturing Survey | Sep | Aug | Jul | Sep'14 | 2014 | 2013 | 2012 |
|---|---|---|---|---|---|---|---|
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 44.8 | 45.0 | 49.9 | 53.0 | 52.4 | 50.0 | 51.8 |
| General Business Conditions (Diffusion Index, %, SA) | -14.67 | -14.92 | 3.86 | 27.41 | 11.83 | 3.87 | 4.22 |
| New Orders | -12.91 | -15.70 | -3.50 | 16.35 | 7.89 | 1.16 | 1.46 |
| Shipments | -7.98 | -13.79 | 7.88 | 23.24 | 12.09 | 4.52 | 11.20 |
| Unfilled Orders | -8.25 | -4.55 | -7.45 | -10.87 | -9.03 | -8.74 | -8.83 |
| Delivery Time | -6.19 | -4.55 | 0.00 | -5.68 | -5.43 | -3.52 | -0.30 |
| Inventories | -18.56 | -17.27 | -8.51 | -7.61 | -1.80 | -5.73 | -2.91 |
| Number of Employees | -6.19 | 1.82 | 3.19 | 3.26 | 10.85 | 3.73 | 8.62 |
| Prices Paid | 4.12 | 7.27 | 7.45 | 23.91 | 20.90 | 21.53 | 24.71 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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