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Empire State Manufacturing Survey Conditions Deteriorated
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The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated in June. The general business conditions index slipped below zero for the first time since November of 2010, falling twenty points to -7.8. The new orders and shipments indexes also posted steep declines and fell below zero. The index for number of employees dropped fifteen points to 10.2. The indexes for both prices paid and prices received were positive but lower than last month, suggesting that increases in input prices and selling prices had slowed. Although future indexes were generally above zero, they were well below last month's levels, indicating that the level of optimism about the six-month outlook had deteriorated significantly.
In a series of supplementary questions, respondents were queried about expected changes in the size of their firms' workforces and about the factors underlying these changes. Parallel questions had been asked in the January 2011 survey. In the current survey, 41 percent of respondents indicated that they expected their workforce to increase in the year ahead, while 17 percent predicted declines in the total number of workers. These results were not quite as positive as the findings of January's survey, which showed that a majority of respondents, or 52 percent, expected increases. In contrast with the earlier survey, the current survey yielded somewhat more positive results for smaller establishments (fewer than 150 employees) than for larger establishments. As in January's survey, high expected sales growth was, by far, the most widely cited factor behind plans to increase employment. Respondents were also queried about anticipated changes in wages and benefit outlays: the vast majority of firms reported that they planned to raise wages by between 0 and 5 percent, while benefits were expected to increase somewhat more.
Business Activity Declines
In June, the general business conditions index fell below zero for the first time since November of 2010, declining a steep twenty points to -7.8. Eighteen percent of respondents—compared with 23 percent in May—reported that conditions had improved over the month, while 25 percent, up from 11 percent last month, reported that conditions had worsened. The new orders index fell twenty-one points to -3.6, and the shipments index tumbled thirty-four points to -8.0. The unfilled orders index fell to zero. The delivery time index slipped five points to -3.1, and the inventories index dropped ten points to 1.0.
Posted: June 15, 2011 Wednesday 08:30 AM