Empire State Manufacturing Continued to Decline in October
This morning we got the latest Empire State Manufacturing Survey.
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -6.8 shows a decrease last month's -2.0, 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 continued to decline in New York State, according to firms responding to the October 2016 Empire State Manufacturing Survey. The headline general business conditions index slipped five points to -6.8. The new orders index edged up but remained negative at -5.6, indicating an ongoing drop in orders, and the shipments index increased to -0.6, suggesting that shipments were essentially flat. Labor market conditions remained weak, with both employment levels and the average workweek reported as lower. Price indexes increased somewhat, and continued to signal moderate input price increases and a slight increase in selling prices. Indexes for the six-month outlook suggested that manufacturing firms 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, but has resumed its decline since mid-year. The latest reading is an 4.8 point decrease 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.