Global| May 15 2018Empire State Manufacturing Index Improves
by:Tom Moeller
|in:Economy in Brief
Summary
The Empire State Manufacturing Index of General Business Conditions rose to 20.1 during May and made up most of its April decline. Expectations had been for 15.0 in the Action Economics Forecast Survey. These data, reported by the [...]
The Empire State Manufacturing Index of General Business Conditions rose to 20.1 during May and made up most of its April decline. Expectations had been for 15.0 in the Action Economics Forecast Survey. These data, reported by the Federal Reserve Bank of New York, reflect business conditions in New York, northern New Jersey and southern Connecticut.
Haver Analytics calculates a seasonally adjusted index that is comparable to the ISM series. The calculated figure increased to 56.8 from 55.6. During the last ten years, the index had a 69% correlation with the quarter-on-quarter change in real GDP.
Most of the series in the Empire State Survey improved in May. The new orders index rose to 16.0 from 9.0, but remained below the September high of 24.4. The shipments index displayed a similar pattern of movement with its rise to 19.1 from 17.5. The delivery times index eased to 13.7 from 15.6, but still indicated nearly the slowest product delivery speeds of the recovery. The inventory index rose to 10.1, the highest level in four months.
The number of employees reading rose to 8.7 from 6.0, but was well below the December high of 22.9. During the last ten years, there has been a 77% correlation between the employment index and the month-on-month change in factory sector payrolls. While 18% of respondents reported a higher payroll level, 10% reported a lower hiring level. Working the other way, the employee workweek reading declined to 11.1, but remained well above the December 2015 low of -17.3.
The prices paid index strengthened to 54.0, its highest level since June 2011. Fifty-six percent of respondents indicated increased prices, while just two percent reported a decline. The prices received rose slightly to 23.0 and also was near the highest level since 2011.
The series measuring expectations of business conditions in six months reversed some of its drastic April decline with a rise to 31.1. Most of the expectation series improved somewhat, but remained below the 2017 highs.
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 | May | Apr | Mar | May'17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| General Business Conditions (Diffusion Index, %, SA) | 20.1 | 15.8 | 22.5 | 3.0 | 16.1 | -2.6 | -2.3 |
| General Business Conditions Index (ISM Adjusted, >50=Increasing Activity, SA) | 56.8 | 55.6 | 57.5 | 52.1 | 54.6 | 48.2 | 48.8 |
| New Orders | 16.0 | 9.0 | 16.8 | -1.9 | 14.6 | -0.8 | -5.6 |
| Shipments | 19.1 | 17.5 | 27.0 | 10.8 | 15.9 | 1.9 | 4.0 |
| Unfilled Orders | 5.0 | 3.7 | 12.7 | -3.7 | 1.9 | -8.8 | -10.5 |
| Delivery Time | 13.7 | 15.6 | 16.2 | 6.7 | 6.1 | -4.8 | -5.3 |
| Inventories | 10.1 | 8.1 | 5.6 | -0.7 | 1.5 | -9.6 | -7.1 |
| Number of Employees | 8.7 | 6.0 | 9.4 | 5.7 | 8.3 | -5.1 | 2.3 |
| Average Employee Workweek | 11.1 | 16.9 | 5.9 | 8.1 | 4.9 | -5.2 | -4.8 |
| Prices Paid | 54.0 | 47.4 | 50.3 | 20.9 | 29.0 | 15.7 | 8.8 |
| Prices Received | 23.0 | 20.7 | 22.4 | 4.5 | 11.0 | 0.7 | 1.2 |
| Expectations 6 Months Ahead | 31.1 | 18.3 | 44.1 | 39.8 | 42.6 | 29.0 | 30.3 |
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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