New York’s manufacturers couldn’t put together much positive news about September, according to a monthly survey conducted by the Federal Reserve Bank of New York. The New York Fed’s Empire State Manufacturing Survey released Sept. 17 showed business conditions deteriorating, as its general business conditions index languished below zero for a second consecutive month. A […]
New York’s manufacturers couldn’t put together much positive news about September, according to a monthly survey conducted by the Federal Reserve Bank of New York.
The New York Fed’s Empire State Manufacturing Survey released Sept. 17 showed business conditions deteriorating, as its general business conditions index languished below zero for a second consecutive month. A majority of the survey’s indicators measuring current conditions declined in September.
The general business conditions index fell 4.6 points to -10.4. That means more manufacturers reported worsening conditions than said the business climate was improving.
It was the lowest reading for the index since November 2010 and missed economists’ expectations. MarketWatch reported that economists it surveyed expected a reading of 0.0, while Briefing.com forecast -3.0.
In September, 28.8 percent of manufacturers indicated business conditions worsened, while just 18.4 percent said they improved. The remaining 52.8 percent of survey respondents thought conditions remained the same as they were last month.
“The headline index has been negative for the past several months, and it’s been trending downward for the past several months,” says Richard Deitz, assistant vice president, regional analysis function at the New York Fed.
The general business conditions index hit a 2012 high point of 20.2 in March. It vacillated between losses and gains over the next few months before beginning its current three-month slide in July.
New York manufacturers reporting getting fewer new orders, as indicated by the survey’s new-orders index slipping 8.5 points to -14. Unfilled orders followed suit, eroding by 4.3 points. The unfilled-orders index notched -14.9 in September.
Shipments also slid, although the shipments index managed to stay above zero. It slipped 1.3 points to 2.8.
In contrast, delivery times increased in September, according to the delivery-time index. It jumped 9.2 points to reach positive
territory at 2.1.
Manufacturers said they paid higher prices and received higher prices for their goods in September. The prices-paid index crept up 2.7 points to 19.2. The prices-received index edged nearly 3 points higher to 5.3.
Hiring took a hit, along with the number of hours manufacturers asked employees to work. The number-of-employees index plunged 12.2 points to 4.3 in September, while the average employee-workweek index skidded 4.6 points to fall below zero at -1.1.
Positive future expectations
Manufacturers didn’t predict as much gloom in the future. Nearly all of the survey’s forward-looking indicators, which measure expectations for a time six months from now, moved up.
The future general business conditions index swelled by 12 points to 27. Over two-fifths of survey respondents, 41.4 percent, predicted better business conditions in six months, and 44.4 percent thought conditions will remain the same. The final 14.2 percent of respondents expect general conditions to worsen.
“The level of optimism has been generally declining throughout almost all of 2012,” Deitz says. “So to some extent, the increase in the future general business conditions index does show that the level of optimism did improve somewhat. But that level is still well below where it was earlier in the year.”
The future general business conditions index topped out at 54.9 this year. It reached that point in January and has been falling since then. September marked the first time manufacturers drove the future index up between two months in 2012.
“It’s very likely they’re factoring in some of the information they already have, information about what their orders might be going forward,” Deitz says.
New orders and shipments will be on the upswing, manufacturers anticipated. The future new-orders index ballooned 14.7 points to 17, and the future shipments index rose 4.5 points to 12.8.
Unfilled orders, on the other hand, are set to wane, according to manufacturers. The future unfilled-orders index dipped 4.3 points to -14.9.
Manufacturers continued to predict lower delivery times and inventories. But they tempered their projections, pushing up the future delivery-time index by 3.1 points to -7.5 and increasing the future inventories index by almost 5.2 points to -4.3.
The future prices-paid index inflated by 8.7 points to 40.4. It was joined by the future prices-received index, which ascended 9.3 points to 23.4.
Payrolls will swell, according to the survey. Manufacturers pushed the future number-of-employees index up by nearly 5 points to 8.5. They drove the future average employee-workweek index out of negative territory with a 10.4-point rise to 2.1.
Manufacturers didn’t predict much change in the level of capital expenditures. The future capital-expenditures index edged down 0.2 points to 12.8. The future technology-spending index inched up 1.6 points to 7.5.
The New York Fed polls a set pool of about 200 manufacturing executives in the state for its monthly survey, and about 100 executives typically respond. The Fed seasonally adjusts data.
Contact Seltzer at rseltzer@cnybj.com