Global| Mar 15 2016Empire State Factory Sector Activity Index Shows Positive Growth
by:Tom Moeller
|in:Economy in Brief
Summary
The Empire State Factory Index of General Business Conditions rebounded strongly this month. The New York index surged to 0.62 from -16.64 in February. It was the first positive reading since July. Expectations had been for -12.0 in [...]
The Empire State Factory Index of General Business Conditions rebounded strongly this month. The New York index surged to 0.62 from -16.64 in February. It was the first positive reading since July. Expectations had been for -12.0 in the Action Economics Forecast Survey. The data are reported by the Federal Reserve Bank of New York and 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 compatible to the ISM series. The adjusted figure rebounded to 51.1 from 47.4. It was above the break-even level of 50 for the first time since June. Since inception in 2001, the business conditions index has had a 65% correlation with the change in real GDP.
Improvement in the component series was mixed. Shipments surged to 13.88, the highest level since April of last year. New orders jumped to 9.57, above 50 for the first time since May, while unfilled orders improved to -3.96, the least negative reading in nearly two years. Elsewhere there was broad-based deterioration. Employment ticked lower to -1.98 from -0.99. During the last ten years there has been a 69% correlation between the index level and the m/m change in factory sector payrolls. Delivery times sped up and the index eased to -3.96, after surging in February. Inventories back-pedaled to -6.93 and showed continued decumulation.
The prices paid index remained at 2.97, its lowest point since October and down from the 2011 high of 69.89. Twelve percent of respondents paid higher prices while 9% paid less. The index of prices received eased to -5.94, also the lowest level since October.
The index of expectations for conditions in six months rebounded to 25.52, the highest level in three months. Strength in new orders, shipments & inventories led the improvement. Expected prices remained depressed.
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 | Mar | Feb | Jan | Mar'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 51.1 | 47.4 | 43.0 | 51.9 | 48.9 | 52.4 | 50.0 |
| General Business Conditions (Diffusion Index, %, SA) | 0.62 | -16.64 | -19.37 | 6.22 | -2.34 | 11.89 | 3.88 |
| New Orders | 9.57 | -11.63 | -23.54 | -1.42 | -5.62 | 7.91 | 1.15 |
| Shipments | 13.88 | -11.56 | -14.39 | 8.66 | 3.97 | 12.09 | 4.55 |
| Unfilled Orders | -3.96 | -6.93 | -11.00 | -13.40 | -10.52 | -9.03 | -8.74 |
| Delivery Time | -3.96 | -1.98 | -13.00 | -2.06 | -5.32 | -5.17 | -3.52 |
| Inventories | -6.93 | 0.00 | -6.00 | -5.15 | -7.06 | -1.80 | -5.73 |
| Number of Employees | -1.98 | -0.99 | -13.00 | 18.56 | 2.72 | 10.85 | 3.73 |
| Prices Paid | 2.97 | 2.97 | 16.00 | 12.37 | 8.84 | 20.90 | 21.53 |
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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