Research >> Economics
Empire State Manufacturing Survey Conditions Improved Modestly
|
The March 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to improve modestly. The general business conditions index was positive for a second consecutive month and, at 9.2, was little changed. The new orders and shipments indexes also remained above zero, though both were somewhat lower than last month’s levels. Price indexes showed that input price increases continued at a steady pace while selling prices were flat. Employment indexes suggested that labor market conditions were sluggish, with little change in employment levels and the length of the average workweek. Indexes for the six-month outlook pointed to an increasing level of optimism about future conditions, with the future general business conditions index rising to its highest level in nearly a year.
In a series of supplementary questions, firms were asked about cash holdings, debt levels, and methods of financing capital spending. Queried about expected changes in their outstanding debt in the year ahead, manufacturers indicated an increasingly widespread inclination to take on more debt. When asked about anticipated changes in cash holdings in the year ahead, more respondents anticipated decreases than increases—for the first time since 2008. Manufacturers, on average, also reported that they were currently holding less cash than usual.
Business conditions improved modestly for a second consecutive month, according to the March 2013 survey. The general business conditions index held steady at 9.2. Twenty-nine percent of respondents reported that conditions had improved over the month, while 20 percent reported that conditions had worsened. The new orders index was also positive for a second consecutive month, indicating that orders were higher, though the index fell five points to 8.2. The shipments index declined five points to 7.8—a sign that shipments rose at a slower pace this month. The unfilled orders index was little changed at -2.2. The delivery time index dropped four points to -2.2, and the inventories index fell five points to -5.4.
Labor Market Conditions Sluggish
Rising input prices were accompanied by steady selling prices. The prices paid index was little changed at 25.8, suggesting that input prices continued to increase at about the same pace as last month. The prices received index fell six points to 2.2, indicating that selling prices were essentially flat. Labor market conditions were sluggish. After climbing above zero last month, the index for number of employees fell five points to 3.2, signaling just a slight increase in employment levels. The average workweek index rose to zero, indicating that the length of the average workweek was unchanged.
An Increasing Level of Optimism
Indexes for the six-month outlook pointed to an increasing level of optimism about future conditions. The future general business conditions index rose three points to 36.4, its highest level in nearly a year. The future new orders and shipments indexes also advanced. Input and selling price increases were expected to pick up: the future prices paid index rose six points to 50.5, and the future prices received index rose eleven points to 23.7. The index for expected number of employees climbed four points to 19.4, while the future average workweek index fell to 2.2. The capital expenditures index held steady at 15.1, and the technology spending index rose seven points to 18.3.
Posted: March 15, 2013 Friday 08:30 AM