Empire State Manufacturing Survey: Activity Down Slightly in September, Continued Growth

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 24.4 was a decrease of 0.8 from the previous month's 25.2.

The Investing.com forecast was for a reading of 19.0.

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.

Business activity continued to grow strongly in New York State, according to firms responding to the September 2017 Empire State Manufacturing Survey. The headline general business conditions index held steady at 24.4. The new orders index rose four points to 24.9 and the shipments index climbed four points to 16.2, pointing to ongoing solid gains in orders and shipments. Unfilled orders increased, and delivery times continued to lengthen. Labor market indicators pointed to a modest increase in employment and hours worked. Both input prices and selling prices rose at a faster pace than last month. Indexes assessing the six-month outlook suggested that firms remained optimistic about future conditions. [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:

Empire State Manufacturing

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 in 2016.

Here is an overlay of the current and future conditions (a six-month outlook). The future conditions index is still optimistic almost six months into the new administration.

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

ISM Manufacturing PMI