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Empire State Manufacturing Survey Conditions Flattened in July
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The July 2016 Empire State Manufacturing Survey indicates that business activity flattened out for New York manufacturers. The headline general business conditions index fell five points to 0.6. The new orders index and the shipments index both fell to levels not far from zero—a sign that orders and shipments were little changed. Labor market indicators pointed to a small decline in employment levels and hours worked. The prices paid index held steady at 18.7, suggesting that moderate input price increases were continuing, and the prices received index held near zero, indicating that selling prices remained steady. Firms were less optimistic about future conditions compared to last month.
Business Activity Levels Off
Business activity was flat for New York manufacturing firms over the last month. The general business conditions index has been in a seesaw pattern around zero for the past several months. After rising above zero last month, the index fell back five points to 0.6. Thirty-one percent of respondents reported that conditions had improved over the month, while 30 percent reported that conditions had worsened. The new orders index fell thirteen points to -1.8, suggesting that orders were little changed. Similarly, the shipments index fell nine points to 0.7, indicating that shipments were relatively unchanged. The unfilled orders index edged down to -12.1, and the delivery time index moved up to 3.3. The inventories index remained negative at -8.8, indicating that firms continued to draw down inventories in July.
Employment Levels Recede
Labor market conditions worsened. The employment index dropped four points to -4.4, pointing to a small decline in employment levels, and at -5.5, the average workweek index showed that hours worked moved lower. The prices paid index was little changed at 18.7, an indication that input prices continued to increase at a moderate pace. The prices received index edged up to 1.1, suggesting that selling prices held steady.
Outlook Remains Positive, though Less So Than Last Month
Indexes for the six-month outlook suggested that respondents remained optimistic about future conditions, though to a lesser extent than in June. The index for future business conditions fell six points to 29.2, and indexes for future new orders and shipments were at similar levels. The index for future employment was near zero, suggesting that firms do not expect any change in employment levels in the months ahead—even so, the index for the expected average workweek fell into negative territory. The capital expenditures index was unchanged at 11.0, and the technology spending index jumped ten points to 14.3.
Posted: July 15, 2016 Friday 08:30 AM