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Empire State Manufacturing Survey Conditions Continue to Gain Momentum
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The February Empire State Manufacturing Survey indicates that manufacturing activity in New York State expanded for a third consecutive month. The general business conditions index rose six points to 19.5, its highest level in more than a year. The new orders index, at 9.7, was positive but down slightly, and the shipments index was little changed at 22.8. The prices paid index held steady at 25.9, while the prices received index fell eight points to 15.3, suggesting that selling prices rose at a slower pace. Employment indexes were positive and close to last month’s levels, indicating that employment levels and the average workweek continued to rise at a modest pace. Indexes for the six-month outlook, while somewhat lower than last month, remained at fairly high levels, signaling considerable optimism about the future.
In a series of supplementary survey questions, manufacturers were asked about their 2012 capital spending plans and how the plans compared with their actual spending for 2011. Parallel questions had been asked in earlier surveys, including the February 2011 survey. Substantially more respondents indicated that they planned increases (46 percent) than reductions (25 percent) in overall capital spending in 2012. These results are not substantially different from those in last February’s survey. As in earlier surveys, the increases most widely expected were for non-computer-related equipment; in contrast, manufacturers remained somewhat reluctant to invest in structures, though less so than in earlier surveys. The median projected level of capital spending for 2012 across all respondent firms was up 29 percent from the median actual level reported for 2011.
The general business conditions index rose six points in February to 19.5, its highest level since June 2010. The index was last negative in October, then rose to a level of around zero in November; subsequently, the readings have become increasingly positive, suggesting that the expansion in business activity for New York manufacturers has gained momentum in recent months. The new orders index fell four points to 9.7, indicating that orders climbed at a slower pace. The shipments index held steady at 22.8. The unfilled orders index inched down two points to -7.1, and the delivery time index rose four points to 1.2. After climbing above zero last month, the inventories index fell eleven points to -4.7; the return to negative territory indicated that inventory levels were slightly lower.
Posted: February 15, 2012 Wednesday 08:30 AM