New York manufacturing index surges in December

The Empire State Manufacturing Survey general business-conditions index climbed 8 points to 9 in December, its highest level since April.

Economists had predicted an index level of 4 in December, according to an article on the website Business Insider. 

It’s the second straight month that the index rose 8 points.

An article about the survey on website marketwatch.com referred to it as “another indication of the upbeat corporate mood” following the election victory of President-elect Donald Trump.

The results of the December survey indicate that business activity “grew modestly” for New York manufacturers, the Federal Reserve Bank of New York said in a news release issued Thursday.

The December reading of 9 followed a 1.5 in November, a -6.8 in October, and -2.0 in September.

A positive index level indicates expansion or growth in manufacturing activity, while a negative reading on the index points to a decline in the sector.

Survey details
The survey found 32 percent of New York manufacturer respondents reported that conditions had improved over the month, while 23 percent said that conditions had worsened.

The new-orders index rose to 11.4, and the shipments index was unchanged at 8.5. 

Labor-market conditions remained “weak,” the New York Fed said, with manufacturers reporting declines in employment and hours worked. 

Inventories continued to fall, and delivery times shortened.

The prices-paid index rose seven points, pointing to a “pickup” in input-price increases, while the prices-received index showed only a “slight” increase in selling prices. 

Indexes for the six-month outlook conveyed a “high degree” of optimism about future conditions, per the New York Fed.

The index for future business conditions “shot up” 20 points to 50.2, its highest level in nearly five years, with 61 percent of respondents expecting conditions to improve in the months ahead. 

The index for future new orders climbed 18 points to 46.7, and the index for future shipments increased 14 points to 40.1. 

The index for future employment indicated that firms expected to expand employment “significantly.” 

The capital-expenditures index climbed nine points to 21.7, and the technology-spending index rose four points to 12.2.

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