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Empire State Manufacturing Survey Conditions Continue to Worsen in December
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The December 2015 Empire State Manufacturing Survey indicates that business activity declined for a fifth consecutive month for New York manufacturers. However, the pace of decline slowed somewhat: the headline general business conditions index, though still negative, moved up six points to -4.6. New orders continued to drop, but shipments increased for the first time since the summer. Price indexes suggested that input prices increased slightly, while selling prices remained slightly lower. Labor market conditions deteriorated noticeably, with survey indicators pointing to a sharp decline in both employment levels and hours worked. Nonetheless, indexes for the six-month outlook increased markedly, suggesting more widespread optimism about future business conditions.
Business Conditions Continue to Worsen
Business activity declined for a fifth consecutive month for New York manufacturing firms, according to the December 2015 survey. However, at -4.6, the general business conditions index was six points above its November level, indicating that the pace of decline moderated somewhat. Nearly 25 percent of respondents reported that conditions had improved over the month, while 29 percent reported that conditions had worsened. Although the new orders index remained negative at -5.1, suggesting that orders continued to fall, the shipments index rose almost ten points to 5.5, marking the first increase in shipments since the summer. The unfilled orders index edged up two points to -16.2, and the delivery time index rose nearly three points to -8.1. The inventories index increased five points to -12.1, indicating ongoing reduction in inventory levels.
Labor Market Conditions Deteriorate Noticeably
The prices paid index was little changed at 4.0, suggesting that input prices continued to increase slightly. Selling prices declined for a fourth consecutive month, with the prices received index remaining close to recent levels at -4.0. Labor market conditions deteriorated noticeably: the index for number of employees, negative for a fourth consecutive month, fell nine points to -16.2, and the average workweek index plunged thirteen points to -27.3, its lowest level since early 2009.
Optimism More Widespread
Indexes for the six-month outlook increased markedly this month, suggesting more widespread optimism about future business conditions. The index for future business conditions jumped eighteen points to 38.5, and the indexes for future new orders and future shipments also rose sharply. Labor market conditions were expected to improve, with the index for expected number of employees little changed at 15.2 and the index for expected workweek rising to 10.1. The capital expenditures index advanced three points to 16.2, and the technology spending index increased seven points to 9.1.
Posted: December 15, 2015 Tuesday 08:30 AM