Empire State Manufacturing Edged Lower in September
This morning we got the latest Empire State Manufacturing Survey.
The diffusion index for General Business Conditions at -2.0 (-1.99 to two decimals) shows a slight increase from last month's -4.2, and signals declining activity.
The Investing.com forecast was for a reading of -1.00.
The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.
Here is the opening paragraph from the report.
Business activity edged lower in New York State, according to firms responding to the September 2016 Empire State Manufacturing Survey. The headline general business conditions index held below zero, and was little changed at -2.0. The new orders index fell eight points to -7.5 and the shipments index fell eighteen points to -9.4— developments that pointed to a marked decline in both orders and shipments. Labor market conditions weakened, with both employment levels and the average workweek reported as lower. Price indexes remained close to last month’s levels, and indicated ongoing moderate input price increases coupled with a continued slight increase in selling prices. Indexes for the six-month outlook suggested that firms generally expect conditions to improve in the months ahead. [source]
Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:
Click this link to access a PDF set of charts of the individual components over the past 12 months.
Since this survey only goes back to July of 2001, we only have one complete business cycle with which to evaluate its usefulness as an indicator for the broader economy. Following the Great Recession, the index has slipped into contraction multiple times, as the general trend slowed. 2015 saw a gradual decline that picked up slightly in 2016. The latest reading is an 2.2 point increase from last month.
Here is an overlay of the current and future conditions (a six month outlook).
Meanwhile, here's another look at the latest ISM Manufacturing Business Activity Index.
Let's compare all five Regional Manufacturing indicators. Here is a three-month moving average overlay of each since 2001 (for those with data).
Here is the same chart including the average of the five. Readers will notice the range in expansion and contraction between all regions.
Let's keep a close eye on some of the regional manufacturing indicators in the months ahead.
Here are the remaining four monthly manufacturing indicators that we track: