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Empire State Manufacturing Survey Conditions Continues to Expand
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to improve in February. The general business conditions index rose 3.5 points to 15.4. The new orders index edged down just slightly, to 11.8. The shipments index retreated 14 points, reversing much of January's 18-point surge, but remained positive at 11.3. The inventories index continued to climb from its December low, reaching its highest level since April. The index for number of employees fell, but the average workweek measure moved up. The prices paid index climbed to a two-and-a half-year high in February, but the measure for prices received was little changed, suggesting some pressure on profit margins. The forward-looking indexes continued to signal widespread optimism, though to a somewhat lesser degree than in January. Indexes for expected prices, both paid and received, declined moderately, after reaching multiyear highs last month.
In a series of supplementary questions, respondents were asked about their capital spending plans for 2011 relative to their actual spending in 2010. Respondents, on balance, reported that they planned to spend more this year than last on new equipment—particularly non-computer-related equipment. The median respondent planned to spend $450,000 overall, up from $292,500 in 2010—a 54 percent increase. When manufacturers were asked what factors contributed the most to their plans to boost capital spending in 2011, the most frequent response was a need for labor-saving equipment, followed closely by favorable trends in sales of, and demand for, firms' products. A substantial proportion of respondents also mentioned long-term investment schedules and a need for energy-saving equipment.
Business Activity Continues to Expand
In February, the general business conditions index rose 3.5 points to 15.4—its third consecutive positive reading and its highest level since June. Thirty-six percent of respondents reported that conditions had improved over the month, while 21 percent reported that conditions had worsened. The new orders index dipped 0.6 points to 11.8, and the shipments index, after soaring 18 points in January, declined 14.1 points to 11.3. The delivery time index climbed 6.3 points to zero. The inventories index rose nearly 5½ points in February, to 9.6, its highest level since April.
Posted: February 15, 2011 Tuesday 08:30 AM