The March 2014 Empire State Manufacturing Survey indicates that business conditions continued to improve for New York manufacturers, though activity grew slowly. At 5.6, the general business conditions index was little changed from last month. The new orders index climbed three points to 3.1, indicating that orders were slightly higher, and the shipments index inched up to 4.0. The unfilled orders index fell further into negative territory, declining ten points to -16.5, and the inventories index advanced to 7.1, pointing to rising inventory levels. The indexes for both prices paid and prices received declined but remained positive, indicating slower price growth. Employment indexes were positive and suggested a small increase in employment levels and hours worked. Indexes for the six-month outlook were down somewhat from last month’s levels, but continued to convey a fairly strong degree of optimism about future conditions, and the capital spending index rose to its highest level in several months.

Business Conditions Continue to Improve Modestly
According to the March 2014 survey, business conditions continued to improve for New York manufacturers, but the pace of growth remained modest. The general business conditions index was little changed at 5.6. Roughly 30 percent of respondents reported that conditions had improved over the month, while 25 percent reported that conditions had worsened. The new orders index climbed three points to 3.1, pointing to a slight increase in orders. The shipments index inched up two points to 4.0, indicating a small rise in shipments, and the unfilled orders index fell ten points to -16.5. The delivery time index dropped to -3.5, indicating somewhat shorter delivery times, and the inventories index climbed twelve points to 7.1—a sign that inventory levels had risen over the month.

Price Increases Slow, Employment Expands
Price indexes were lower in March, and pointed to a slowing in the pace of both input price increases and selling price increases. The prices paid index fell four points to 21.2, while the prices received index fell thirteen points to 2.4, suggesting only a slight increase in selling prices. Labor market conditions continued to improve. The employment index fell five points but, at 5.9, indicated a small increase in employment levels. The average workweek index, holding steady at 4.7, pointed to a small increase in hours worked.
Six-Month Outlook Remains Optimistic

Indexes for the six-month outlook continued to convey a solid degree of optimism about future business conditions, though to a somewhat lesser degree than last month. The index for expected general business conditions fell six points to 33.2, and the index for future new orders dropped to 36.0, down nine points from last month’s two-year high. Indexes for future price increases inched higher. The index for expected number of employees, though lower than last month, remained firmly in positive territory. After falling sharply last month, the capital expenditures index rose fourteen points to 16.5, and the technology spending index increased to 7.1.