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Economy in Brief

U.S. Industrial Production Firm Again
by Tom Moeller March 15, 2004

Industrial production rose another 0.7% in February following an upwardly revised 0.8% gain in January. The rise easily outpaced Consensus expectations for a 0.4% increase.

Production in the factory sector jumped 1.0% following the 0.3% January gain (3.2% y/y). Output of utilities fell 0.7% after a revised 5.3% jump in January due to cold weather.

Output in selected high-technology industries again led the factory sector with a 2.1% m/m surge (23.5% y/y). Output of semiconductors & related equipment surged 3.0% (42.6% y/y). Output of computers & peripheral equipment jumped 2.1% (16.7% y/y), the eighth consecutive monthly gain at about that rate, and output of communications equipment rose 0.3% (-1.3% y/y).

Excluding high-tech, factory output jumped 0.9% (1.9% y/y). Higher output of motor vehicles & parts, up 1.6%, led that gain but machinery output also rose a strong 1.7% (6.4% y/y). Non-durables output jumped 0.9% (0.7% y/y) due to across the board strength.

Total capacity utilization rose to 76.6%, the highest level since June '02. Y/Y growth in capacity was a low 1.1%, the slowest since early 1989.

Production & Capacity Feb Jan Y/Y 2003 2002 2001
Industrial Production 0.7% 0.8% 2.7% 0.3% -0.6% -3.4%
Capacity Utilization 76.6% 76.1% 75.4%(2/03) 74.9% 75.6% 77.4%
Empire State Index Down
by Tom Moeller March 15, 2004

The March Empire State Index of General Business Conditions fell to 25.33 from the record high in February. The 16.7 point m/m decline was versus a more moderate decline expected by the Consensus and was to the lowest level in six months.

The new orders index dropped sharply to 23.52, also the lowest level in six months. The shipments index fell just slightly after the 15 point slump in January and the employment index slid further to 9.72, a six month low.

The index of prices surged 16.4 points m/m to 50.0, another series' record.

The February index of expectations for business conditions six months ahead fell slightly m/m, the third consecutive monthly decline from the record high in December. Expectations for capital expenditures improved for the second month in a row.

The Empire State Manufacturing Survey is a monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York. Participants from across the state in a variety of industries respond to a questionnaire and report the change in a variety of indicators from the previous month. Respondents also state the likely direction of these same indicators six months ahead. April 2002 is the first report, although survey data date back to July 2001.

Like the Philadelphia Fed Index of General Business Conditions, the Empire State Business Conditions Index reflects answers to an independent survey question, not the components.

For more on the Empire State Manufacturing Survey, including methodologies and the latest report, click here.

Empire State Manufacturing Survey Mar Feb 3/03 2003 2002 2001
General Business Conditions (diffusion index) 25.33 42.05 -0.35 16.30 7.02 -13.57
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