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Empire State Manufacturing Survey Conditions Improved
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The Empire State Manufacturing Survey indicates that manufacturing activity improved in New York State in December. The general business conditions index rose nine points to 9.5, its highest level since May. The new orders index climbed above zero, to 5.1, and the shipments index advanced eleven points to 20.9. Input price increases steepened, with the prices paid index rising six points to 24.4. Selling prices increased only modestly, with the prices received index inching down to 3.5. Employment indexes were mixed, showing a slight increase in employment levels but a slight decrease in the length of the average workweek. Future indexes rose sharply for a second consecutive month, with the future general business conditions index climbing thirteen points to 52.3, suggesting a return to the high levels of optimism seen earlier in 2011.
In response to a series of supplementary survey questions about changes in input and selling prices, manufacturers predicted that input prices would increase by slightly more in calendar 2012 than in 2011 in some budget categories but by less in others. Prices paid overall were reported to have risen 4.3 percent on average in 2011, and this rate was expected to slow somewhat to 3.5 percent in 2012. Among the broad budget categories, employee benefits showed the steepest price increases—both actual and expected; respondents reported that these costs climbed 7.3 percent, on average, in 2011 and were expected to rise 6.1 percent in 2012. These increases were well below the 10 percent average jump anticipated by respondents in last December’s survey. Wages were expected to climb 2.8 percent on average in 2012. As for expected changes in selling prices, manufacturers foresaw an average increase of 1.8 percent over the next year, down from 3.2 percent in last December’s survey.
The general business conditions index rose nine points in December to reach 9.5, indicating that business activity improved over the month. The index had been near or below zero since June, so this reading was the first since May to show that manufacturing conditions had registered a measurable gain. Nearly one-third of respondents reported that conditions were better in December, while about one-fifth reported that conditions had worsened. The new orders index advanced seven points, rising above zero to 5.1—a sign that orders were modestly higher over the month. The shipments index climbed eleven points to 20.9, indicating a significant increase in shipments. The unfilled orders index moved deeper into negative territory, falling eight points to -15.1. The delivery time index held steady at 0.0, and the inventories index rose but remained below zero at -3.5.
Posted: December 15, 2011 Thursday 08:30 AM