The October 2014 Empire State Manufacturing Survey indicates that business activity grew modestly for New York manufacturers. The headline general business conditions index fell twenty-one points to 6.2, signaling that the pace of growth slowed significantly from last month. The new orders index dropped nineteen points to -1.7, indicating a slight decline in orders, and the shipments index fell twenty-six points to 1.1, indicating that shipments were flat. The employment index rose seven points to 10.2, pointing to an increase in employment levels, while the average workweek index fell to a level just below zero, suggesting that hours worked held steady. Both price indexes fell this month—a sign that the pace of growth had moderated for input prices and selling prices. Indexes for the six-month outlook were somewhat lower than last month, but continued to convey a high degree of optimism about future business conditions.

Growth in Business Activity Slows
After reaching a multiyear high last month, the general business conditions index plummeted twenty-one points to 6.2, pointing to a substantial slowing in the pace of growth in business activity for New York manufacturers. The decline in the index was driven by a drop in the share of respondents reporting that conditions had improved relative to the preceding month’s; this share fell from 46 percent to 25 percent in October, while the share of respondents reporting worsening conditions was little changed at 19 percent. The new orders index fell eighteen points to -1.7—evidence of a slight decrease in orders. Like the drop in the general business conditions index, this decline reflected a large drop in those reporting an increase. The shipments index tumbled twenty-six points to 1.1, indicating that orders were flat on the heels of a sharp increase last month. The unfilled orders index rose slightly but remained negative at -4.5. The delivery time index was little changed at -5.7, and the inventories index, up ten points to 2.3, showed that inventory had increased slightly after declining the prior three months.

Price Increases Less Widespread
Both price indexes declined, indicating a slower pace of growth in input and selling prices alike. The prices paid index fell thirteen points to 11.4, its lowest level in more than two years, and the prices received index fell eleven points to 6.8. Employment indexes pointed to a modest increase in employment levels and little change in hours worked. The index for number of employees climbed seven points to 10.2, and the average workweek index dropped four points to -1.1.

Growth Expected to Continue in the Months Ahead
Most of the indexes assessing the future outlook were down from last month. Nevertheless, they remained fairly high by historical standards, and conveyed an expectation that activity would continue to grow in the months ahead. The index for future general business conditions fell five points to 41.7. The future new orders index fell three points to 42.3, and the future shipments index declined five points to 42.5. The index for expected number of employees dropped to 12.5, and the future average workweek index fell below zero. The capital expenditures index climbed nine points to 21.6, its highest level in several months, and the technology spending index rose to 15.9.