New York manufacturing business activity expands in November

The Federal Reserve Bank of New York reported Nov. 17 that its Empire State Manufacturing Survey general business-conditions index rose 4 points to 10.2 in November.

The rise indicates “a pace of growth somewhat faster than last month’s,” the New York Fed said in a news release posted on its website.

Nonetheless, the October and November readings for this index point to a “downshift” in the pace of growth compared with the May-September period, when the index averaged around 20. 

About 35 percent of respondents reported that conditions had improved over the last month, while 24 percent reported that conditions had worsened. 

The “good news” is that New York manufacturers are seeing growth, Randall Wolken, president of the Manufacturers Association of Central New York (MACNY), says, commenting on the report.

“It wasn’t as robust as maybe that earlier period May to September, but it’s still a good and healthy growth, which is what we want to be able to see. And that, coupled with long-term optimism … bodes well as we go through the rest of this year into next year,” says Wolken.

The new-orders index “bounced back” into positive territory after dipping below zero last month. Its 11 point rise, to 9.1, pointed to a “modest” increase in orders.

The shipments index also recovered from a sharp decline last month, climbing 11 points to 11.8.

“When you see those [indexes] rising again and showing positive growth, it bodes well for the coming months,” says the MACNY leader.

The unfilled-orders index remained negative, falling three points to -7.5. The delivery-time index, which was down four points to -9.6, indicated that delivery times were “shorter,” and the inventories index, at zero, suggested that inventory levels were “unchanged.”

The index for number of employees edged down to 8.5, indicating a modest increase in employment levels. At -7.5, the average-workweek index reflected a decline in hours worked for a second consecutive month.

The prices-paid index inched down to 10.6, its lowest level in more than two years, pointing to a “fairly slow pace of growth” in input prices. 

The prices-received index recorded its lowest reading in a year, falling 7 points to zero in a sign that selling prices were “flat.” 

Indexes assessing the six-month outlook generally rose this month, and conveyed “considerable optimism” about future business activity, the New York Fed said. 

The index for future general-business conditions climbed 6 points to 47.6, its highest level since January 2012. 

The future new-orders index rose 5 points to 47.0, and the future-shipments index rose 2 points to 44.7. 

The index for expected number of employees jumped 12 points to 24.5, and the future average-workweek index advanced to 8.5. 

The capital-expenditures index moved up 6 points to 27.7, its highest level in more than two years, and the technology-spending index rose to 19.2.

One of the “key” indicators would be that capital-expenditure index, says Wolken. “…and that index moved up for the six-month [outlook], which really means that [firms] start planning and executing and when you start investing capital, then you’re going to be also looking longer term at employees and work week.”

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.        

Contact Reinhardt at ereinhardt@cnybj.com