Empire State Mfg Survey: Strong Growth in November

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 30.9 was an increase of 11.1 from the previous month's 19.8. The Investing.com forecast was for a reading of 21.6.

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 grew strongly in New York State, according to firms responding to the November 2021 Empire State Manufacturing Survey. The headline general business conditions index climbed eleven points to 30.9. New orders and shipments posted substantial increases, and unfilled orders rose. Delivery times were significantly longer. Employment grew at its fastest pace on record, and the average workweek increased. The prices paid index held near its record high, and the prices received index reached a new peak. Firms planned significant increases in capital and technology spending. Looking ahead, firms remained optimistic that conditions would improve over the next six months, though optimism dipped. [Full report]

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 two complete business cycles 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. We saw a gradual decline in 2015 that picked up in 2016, with a giant dip in 2020 due to COVID-19.

Here is an overlay of the current and future conditions (a six-month outlook).