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Empire State Manufacturing Survey Conditions Expands Slightly
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The June Empire State Manufacturing Survey indicates that manufacturing activity expanded slightly over the month. The general business conditions index fell fifteen points, but remained positive at 2.3. The new orders index declined six points to 2.2, and the shipments index fell a steep nineteen points to 4.8. Price indexes were markedly lower, with the prices paid index falling eighteen points to 19.6 and the prices received index dropping eleven points to 1.0. Employment indexes also retreated, though they still indicated a small increase in employment levels and a slightly longer average workweek. Indexes for the six-month outlook were generally lower than last month’s levels, suggesting that optimism was waning somewhat, with the future general business conditions index falling to 23.1, its fifth consecutive monthly decline.
In a series of supplementary questions, manufacturers were asked about their capital spending plans: 43 percent said that they expected to increase capital spending over the next six to twelve months, while just 16 percent planned reductions—a somewhat more positive balance than in the August 2010 survey, when the same questions had been asked. In the current survey, high capacity utilization emerged as the most widely cited factor contributing to higher capital spending; it had not been identified as a leading factor in 2010. High expected sales growth and a need to replace existing capital equipment (especially non-IT equipment) were also widely cited in the current survey as reasons for the increase in capital spending.
The June general business conditions index fell a significant fifteen points to 2.3, its lowest level since November of 2011. This level suggests that activity expanded over the month, but only slightly. Thirty-one percent of respondents reported that conditions had improved over the month, while 28 percent reported that conditions had worsened. The new orders index fell six points to 2.2, indicating a slight rise in orders. The shipments index fell a steep nineteen points to 4.8. The unfilled orders index remained negative, and was little changed at -5.2. The delivery time index held at zero, while the inventories index fell thirteen points to -8.3, indicating a modest decline in inventory levels.
Posted: June 15, 2012 Friday 08:30 AM