New York manufacturing index turns positive in November

The Empire State Manufacturing survey general business-conditions index rose 8 points to 1.5 in November as respondents reported seeing increases in new orders and shipments.

It’s the benchmark index’s first positive reading since measuring 0.6 in July.

The results of the November survey indicate that business activity “stabilized” for New York manufacturers, the Federal Reserve Bank of New York said in its survey report issued Nov. 15.

The responding firms said that business activity was “essentially flat” in November, the New York Fed said.

Still, the November reading of 1.5 was substantially better than the readings of -6.8 in October, a -2.0 in September, and a -4.2 in August.

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.

The survey found that 27 percent of New York manufacturing respondents reported that conditions had improved over the month, while 25 percent reported that conditions had worsened.

It’s “good” to see the general business-conditions index rising into positive territory again, says Randy Wolken, president of the Manufacturers Association of Central New York.

“I especially liked the fact that new orders and shipments both rose, which are good indicators that business is strong when you’re getting new orders and you’re shipping,” says Wolken. He spoke with CNYBJ the day the report came out.

Inside the survey
The new-orders index climbed 9 points to 3.1, indicating that orders “edged higher,” and the shipments index also rose 9 points to 8.5, pointing to an “increase” in shipments, according to the New York Fed.

The unfilled-orders index inched down to -12.7, and at -5.5, the delivery-time index “signaled shorter” delivery times.

The inventories index fell 11 points to -23.6, a multiyear low, indicating that inventory levels declined “significantly.”

Both employment indexes remained negative in November.

The index for number of employees fell 6 points to -10.9, a sign that employment levels were “contracting,” and the average-workweek index, little changed at -10.9, pointed to a decline in hours worked.

The prices-paid index fell 7 points to 15.5, indicating that input price increases “slowed,” and the prices-received index edged down to 2.7, signaling that selling prices were “marginally higher.”

The inventories index fell 11 points to -23.6, pointing to a “marked decline” in inventory levels, the New York Fed said.

Future outlook
Indexes for the six-month outlook suggested that respondents were “somewhat less” optimistic about future conditions than they were last month.

The index for future business conditions retreated 6 points to 29.9.

Wolken says he’s happy manufacturers still have an optimistic six-month outlook, which he believes is “helpful,” figuring New York firms see the potential for growth opportunities in the future.

The index for future new orders and the index for future shipments fell to similar levels, the New York Fed said.

Indexes for future employment and the future average workweek, at 10.9 and 10.0, respectively, indicated that firms expected to expand employee rolls and hours worked in the months ahead.

Indexes for future prices suggested that firms anticipated an increase in both input prices and selling prices over the next six months.

The capital-expenditures and technology-spending indexes were “little changed,” and pointed to “modest” increases in spending for both categories.

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