Empire State Manufacturing Stabilized in November
This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 1.50 shows an increase from last month's -6.8, and signals improving activity. This is its first positive reading since July.
The Investing.com forecast was for a reading of -2.50.
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 stabilized in New York State, according to firms responding to the November 2016 Empire State Manufacturing Survey. The headline general business conditions index climbed out of negative territory for the first time in four months, rising eight points to 1.5. The new orders and shipments indexes also turned positive, rising to 3.1 and 8.5, respectively. Labor market conditions remained weak, with the number of employees and average workweek indexes both at -10.9. The inventories index fell eleven points to -23.6, pointing to a marked decline in inventory levels. Although price indexes were lower, they remained positive, suggesting a slower pace of growth in both input prices and selling prices. Indexes for the six-month outlook conveyed somewhat less optimism about future conditions than in October. [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 resumed its decline mid-year. The latest reading is an 8.3 point increase from last month and its first positive reading since July.
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.