N.Y. manufacturing index jumps to nearly 5-year high

New York manufacturers say they are seeing their strongest business conditions in almost five years.

The Federal Reserve Bank of New York reported Sept. 15 that its Empire State Manufacturing Survey general business-conditions index rose nearly 13 points to 27.5 in September, its highest level since late 2009. That easily beat analysts’ average expectations of an index reading of 16.0, according to Yahoo Finance data.

The September figure is up from the August index reading of 14.7, which was down more than 11 points from July’s reading of 25.9.

“We’re at a multi-year high … in the general-business conditions [index], so [that] would suggest that we’re headed in the right direction,” says Randall Wolken, president of the DeWitt–based Manufacturers Association of Central New York (MACNY).

Wolken spoke with the Business Journal News Network on Sept. 16.

The New York Fed’s survey found that 46 percent of respondents reported that conditions had improved in September, while 18 percent said that conditions had worsened.

The new-orders index moved up three points to 16.9 in September, and the shipments index advanced two points to 27.1, according to the latest survey.

“The reality is they’re [manufacturers are] producing more and they’re shipping more and that bodes well,” says Wolken.

The survey also showed that the unfilled-orders index dropped three points to -10.9, suggesting that fewer orders remained unfilled over the month.

The delivery-time index was “little changed” at -5.4, and the inventories index rose seven points to -7.6, which indicated a decline in inventory levels for a third consecutive month, according to the New York Fed.

The prices-paid index was “slightly lower” this month, falling three points to 23.9, a sign that input-price increases were “somewhat less widespread.”

The prices-received index, however, jumped nine points to 17.4, indicating a “pickup in the pace” of selling-price increases, the New York Fed reported.

The index for number of employees fell 10 points to 3.3, and the average-workweek index dropped five points to 3.3, but they still indicate growth in those indicators because they are above zero.

“These [index readings for new orders, shipments, and employment] are all very positive signs for continued growth in the manufacturing sector,” says Wolken.

In addition to reporting strong current conditions, New York manufacturers are also indicating that the next six months will be bright.

Indexes for the six-month outlook conveyed a “high degree of optimism” about future business conditions, the New York Fed said in its survey report.

Wolken points to the increases in the indexes measuring new orders and shipments as potential factors influencing the optimistic outlook among manufacturers.

“I think it’s one reason they have a positive general outlook for the next six months because those indicators would suggest that they’ll have strong production need,” he says.

The index for future general-business conditions was unchanged from last month at 46.7.

The future new-orders index fell five points to 45.6, and the future shipments index declined seven points to 47.5.

Though both of these indexes were somewhat below their August levels, they remained “high by historical standards,” according to the New York Fed.

The index for expected number of employees dipped to 14.1, and the future average-workweek index was 5.4.

The capital-expenditures index fell five points to 13.0, and the technology-spending index edged down three points to 9.8.

The New York Fed distributes the Empire State Manufacturing Survey on the first day of each month to the same pool of about 200 manufacturing executives in New York.

On average, about 100 executives return responses, it says.

Contact Reinhardt at ereinhardt@cnybj.com