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Empire State Manufacturing Survey Conditions edged lower in September
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Business activity edged lower in New York State, according to firms responding to the September 2016 Empire State Manufacturing Survey. The headline general business conditions index held below zero, and was little changed at -2.0. The new orders index fell eight points to -7.5 and the shipments index fell eighteen points to -9.4—developments that pointed to a marked decline in both orders and shipments. Labor market conditions weakened, with both employment levels and the average workweek reported as lower. Price indexes remained close to last month’s levels, and indicated ongoing moderate input price increases coupled with a continued slight increase in selling prices. Indexes for the six-month outlook suggested that firms generally expect conditions to improve in the months ahead.
Business Conditions Remain Weak
Echoing their August assessment, manufacturing firms in New York State reported a slight decline in business activity in September. The general business conditions index inched up two points, but remained negative at -2.0. Twenty-two percent of respondents reported that conditions had improved over the month, while 24 percent reported that conditions had worsened. The new orders index fell eight points to -7.5, indicating that orders dropped, and the shipments index tumbled eighteen points to -9.4, pointing to a pronounced reduction in shipments. The unfilled orders index slipped to -11.6. The delivery time index fell to -6.3, signaling shorter delivery times. The inventories index moved down eight points to -12.5, indicating that inventory levels declined at a faster pace than in August.
Labor Market Deteriorates
The employment index fell thirteen points to -14.3, indicating that employment levels contracted. The average workweek index posted a similar decline, falling fourteen points to -11.6—a sign of retrenchment in hours worked. Both of these indexes reached their lowest levels of 2016. The prices paid index was little changed at 17.0, indicating that input prices continued to rise at a moderate pace, and the prices received index held steady at 1.8, signaling that selling prices edged slightly higher.
Outlook Remains Optimistic
Indexes for the six-month outlook suggested that respondents were more optimistic about future conditions than they were last month. The index for future business conditions climbed eleven points to 34.5. The index for future new orders advanced to a similar level, while the index for future shipments, though positive, declined. The index for future employment moved up into positive territory, suggesting that firms expected to expand employment in the months ahead. Indexes for future prices rose considerably, suggesting that firms expected both input prices and selling prices to increase more significantly over the next six months. The capital expenditures and technology spending indexes both climbed to 10.7.
Posted: September 15, 2016 Thursday 08:30 AM