Empire State Manufacturing Shows a Robust Expansion

September 15, 2014

by Doug Short

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions continues is expanding at a faster pace. The headline number has increased to 27.5, up from 14.7 last month and its highest level since October 2009. The Investing.com forecast was for a reading of 16.0. 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.


The September 2014 Empire State Manufacturing Survey indicates that business activity expanded at a robust pace for New York manufacturers. The headline general business conditions index rose thirteen points to 27.5, a multiyear high. The new orders index moved up three points to 16.9, and the shipments index advanced two points to 27.1. The unfilled orders index fell three points to -10.9. The prices paid index declined three points to 23.9, indicating a slower pace of input price increases, while the prices received index climbed nine points to 17.4, suggesting a pickup in the pace of selling price increases. Employment indexes showed a slight increase in employment levels and hours worked. Indexes for the six-month outlook conveyed a high degree of optimism about future business conditions.

Here is a chart illustrating both the General Business Conditions and Future General Business Conditions (the outlook six months ahead):

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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. It had remained in a relatively narrow range over the past year, but the last four months have been logged higher numbers.

Meanwhile, here's another look at the latest ISM Manufacturing Business Activity Index.

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I'll keep a close eye on some of the regional manufacturing indicators in the months ahead.

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