New York manufacturing index slips in October

The Empire State Manufacturing Survey general business-conditions index fell 5 points to 1.5 in October, the Federal Reserve Bank of New York reported Oct. 15.

Despite the dip, the result indicates that business conditions “held steady” for New York manufacturers in October, according to the New York Fed.

That’s because the survey found roughly a quarter of respondents indicated that conditions had improved, while a similar amount of respondents felt conditions had worsened.

October’s result follows four straight months in which the general business-conditions index indicated that manufacturing activity in the Empire State grew “modestly,” the New York Fed said in the survey report.

“The steady condition is a good condition to be in versus a declining condition,” says Randall Wolken, president of the Manufacturers Association of Central New York (MACNY).

The survey’s new-orders index rose five points to 7.8 in October, and the shipments index fell three points to 13.1, suggesting that both orders and shipments increased “modestly” over the month, the New York Fed said.

“If you’ve got new orders, then it results in additional production,” MACNY’s leader says.

The prices-paid index remained unchanged at 21.7, while the prices-received index fell six points to 2.4.

Labor-market conditions were also “steady” in October. The index for number of employees fell for a second consecutive month, but was slightly positive at 3.6, while the average-workweek index inched up to 3.6.

Price indexes pointed to a “steady pace” of input-price increases and “little change” in selling prices, according to the New York Fed.

The prices-paid index was unchanged at 21.7, and the prices-received index fell 6 points to 2.4.

Indexes for the six-month outlook continued conveying a “strong” degree of optimism about future-business conditions, according to the survey report.

The future general-business conditions index held near last month’s reading of 40.8, a “year-and-a-half high.”

The indexes for expected new orders and expected shipments remained at “strong levels.”

The future prices-paid index rose 6 points to 45.8 and the future prices-received index held steady at 25.3.

Future employment indexes indicated an expectation that employment levels and hours worked would be somewhat higher in the months ahead.

The capital-expenditures index and technology-spending index were “little changed,” at 15.7 and 12.1, respectively.

“People are basing everything from capital investments to employee investment on their outlooks,” MACNY’s Wolken says.

Supplementary questions focused on recent and expected changes in firms’ borrowing needs and credit availability. Parallel questions were asked in October 2012 and in earlier surveys.

As in earlier surveys, a majority of respondents to the current survey reported no change in borrowing needs over the past year and over the past three months.

When asked about changes in credit availability, the vast majority of respondents reported no change over the past three months and over the past year.

In contrast with last year’s survey, firms in this month’s survey reported increased borrowing costs, on net, over the past three months.

Earlier surveys indicated net declines in borrowing costs, according to the New York Fed.

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.

MACNY is a not-for-profit 501(c)(6) association representing almost 330 businesses and organizations across upstate New York. 

Contact Reinhardt at ereinhardt@cnybj.com