New York manufacturing index edges down in March

The Federal Reserve Bank of New York reported that its Empire State Manufacturing Survey general business-conditions index fell less than a point to 6.9 in March.

Economists had been expecting a reading of 8.5, according to MarketWatch. Still, any reading above zero indicates improving conditions.

The New York Fed, in its March 16 report, described the general business-conditions index as “little changed,” suggesting that conditions for New York manufacturers continued “to improve modestly and at roughly the same pace as in the past several months.” 

The monthly survey found 26 percent of respondents felt that conditions had improved, while 19 percent reported that conditions had worsened.

The March report provides an “accurate” picture, says Randall Wolken, president of the Manufacturers Association of Central New York (MACNY).

“I think we’re still seeing a modest expansion at a reasonable pace,” he adds.

When the general-business conditions index remains in positive territory, “expansion and modest growth usually is what we see,” says Wolken.

He spoke with CNYBJ on March 17.

The Empire State Survey’s new-orders index declined for a second consecutive month, falling 4 points to -2.4, which the New York Fed sees as “evidence of a slight decline in orders.” 

The shipments index fell 6 points to 7.9, and the unfilled-orders index declined 7 points to -13.4. 

The delivery-time index dropped to -2.0, indicating “slightly shorter” delivery times, and the inventories index fell to -5.1, signaling that inventory levels were “lower.” 

The index for number of employees climbed 8 points to 18.6, pointing to “significant” gains in employment, and the average-workweek index rose 6 points to 5.2, indicating a “small increase” in the average workweek.

“The labor-market indicators usually are a solid sign that people are believing that an expansion will continue because they wouldn’t be bringing on additional employment or lengthening the average workweek if they didn’t expect the expansion to continue,” says Wolken.

Pricing pressures remained “subdued,” the New York Fed said. 

The prices-paid index edged down 2 points to 12.4, signaling a “moderate increase” in input prices for a sixth consecutive month. 

The prices-received index climbed 5 points to 8.3, indicating a “modest increase” in selling prices. 

As in February, indexes assessing the six-month outlook, though generally positive, conveyed more restrained optimism about future business activity than they had throughout much of the past year. 

After plunging last month, the index for future general business conditions rose 5 points to 30.7, remaining well below readings that were generally above 40 from 

May 2014 through January 2015. 

The future new orders and shipments indexes declined, the New York Fed said. 

The future prices paid and future prices-received indexes edged higher, but remained subdued. A significant expansion in employment levels was anticipated, with the index for expected number of employees rising to 28.9. 

After reaching a multiyear high last month, the capital-expenditures index fell back to 18.6, and the technology spending index dropped to 7.2.

“Those [indexes] are still … good indicators for future growth,” says Wolken. 

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.