Global| Oct 15 2019Empire State Manufacturing Activity & Expectations Improve Slightly
by:Tom Moeller
|in:Economy in Brief
Summary
The Empire State Manufacturing Index of General Business Conditions for October rose to 4.0 after falling to 2.0 in September. A reading of 1.0 had been expected in the Action Economics Forecast Survey. A slightly improved 30% of [...]
The Empire State Manufacturing Index of General Business Conditions for October rose to 4.0 after falling to 2.0 in September. A reading of 1.0 had been expected in the Action Economics Forecast Survey. A slightly improved 30% of respondents reported that conditions had improved in October from September while an increased 26% reported a worsening. The Empire State data, reported by the Federal Reserve Bank of New York, reflect business conditions in New York, northern New Jersey and southern Connecticut.
Using the Empire State figures, Haver Analytics calculates a seasonally adjusted index that is comparable to the headline ISM index. The ISM-adjusted index eased to 52.1 this month from 52.8 in September, but remained higher than June's low of 48.4. A reading of 50 or greater indicates expansion in business activity. During the past 15 years, there has been a 64% correlation between the index level (which measures change) and the quarter-to-quarter change in real GDP.
The component series in the Empire State survey continued to demonstrate a mixed performance. The unfilled orders series fell m/m as did inventories. The delivery times series also declined and indicated the quickest product delivery time since June. The shipments series improved to the highest level since May. New orders were steady but were improved versus the negative readings in June and July.
Labor market conditions turned in a mixed performance as the jobs index eased to 7.6, though it continued to indicate a rising level of hires. Seventeen percent of respondents reported higher job levels while ten percent reported a decline. The average workweek index rose to the highest level since September of last year.
The prices paid index reversed its September improvement and fell to the lowest level since July 2017. A lessened 29% of respondents reported higher prices while a fairly steady six reported a decline. The prices received index eased moderately.
The series measuring expectations for business conditions in six months recaptured a piece of its sharp September decline. Each of the components remained weak except the prices paid series. The capital spending series also remained lackluster.
The Empire State figures are diffusion indexes, which are calculated by subtracting the percentage of respondents reporting declines from the percentage 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 | Oct | Sep | Aug | Oct'18 | 2018 | 2017 | 2016 |
|---|---|---|---|---|---|---|---|
| General Business Conditions (Diffusion Index, %, SA) | 4.0 | 2.0 | 4.8 | 20.0 | 19.8 | 16.1 | -2.6 |
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 52.1 | 52.8 | 52.0 | 55.9 | 56.4 | 54.6 | 48.1 |
| New Orders | 3.5 | 3.5 | 6.7 | 20.8 | 16.5 | 14.5 | -0.9 |
| Shipments | 13.0 | 5.8 | 9.3 | 24.1 | 20.4 | 15.9 | 1.9 |
| Unfilled Orders | -12.5 | -2.6 | -9.7 | -8.4s | 3.5 | 1.9 | -8.8 |
| Delivery Time | -2.5 | 0.7 | 0.0 | 5.0 | 9.1 | 6.1 | -4.8 |
| Inventories | -0.6 | 8.5 | 5.8 | 0.8 | 5.9 | 1.5 | -9.6 |
| Number of Employees | 7.6 | 9.7 | -1.6 | 8.5 | 12.4 | 8.1 | -5.1 |
| Average Employee Workweek | 8.3 | 1.7 | -1.3 | 1.4 | 7.8 | 4.6 | -5.1 |
| Prices Paid | 23.1 | 29.4 | 23.2 | 42.0 | 45.8 | 29.0 | 15.7 |
| Prices Received | 6.3 | 9.2 | 4.5 | 14.3 | 19.3 | 11.0 | 0.7 |
| Expectations 6 Months Ahead | 17.1 | 13.7 | 25.7 | 29.6 | 35.2 | 42.7 | 29.0 |
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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