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Empire State Manufacturing Survey Conditions continues modest growth in January
Business activity continued to grow modestly in New York State, according to firms responding to the January 2017 Empire State Manufacturing Survey. The headline general business conditions index was little changed at 6.5. The new orders index fell to 3.1, pointing to a small increase in orders, and the shipments index held steady at 7.3. Inventories edged higher for the first time in more than a year. Labor market conditions remained weak, though less so than in recent months, with manufacturers reporting a slight decline in employment and somewhat shorter workweeks. Both input prices and selling prices increased more rapidly this month, with the prices paid index climbing to its highest level in nearly three years, and the prices received index also jumping to a multiyear high. Indexes for the six-month outlook continued to convey a high degree of optimism about future conditions, with the index for future business conditions matching last month’s nearly five-year high.
Business Activity Continues to Expand
Manufacturing firms in New York State reported that business activity grew in January. The general business conditions index was little changed at 6.5, its third consecutive positive reading. The new orders index fell seven points to 3.1, indicating that orders increased at a slower clip than last month, and the shipments index held steady at 7.3, pointing to an ongoing increase in shipments. The unfilled orders index rose to -1.7, and the delivery time index rose to -2.5. The inventories index climbed 16 points to 2.5, signaling a slight increase in inventory levels—the first increase since mid-2015.
Price Increases Pick Up Markedly
As has been the case for the past several months, both employment indexes were negative in January. The index for number of employees rose but held below zero at -1.7, a sign that employment levels edged slightly lower; the average workweek index, at -4.2, pointed to a small decline in hours worked. Prices increased significantly this month. The prices paid index advanced fourteen points to 36.1, its highest level since 2014. The prices received index also climbed fourteen points, rising to 17.6, signaling a pickup in selling price increases.
Firms Remain Highly Optimistic
Indexes for the six-month outlook suggested that respondents remained very optimistic about future conditions. The index for future business conditions was unchanged at 49.7, matching last month’s multiyear high. Delivery times were expected to be longer, and inventories were expected to increase. The index for future employment and the future average workweek indicated that firms expected strong growth in employment and hours worked. The capital expenditures index climbed four points to 25.2, and the technology spending index edged up to 14.3.
Posted: January 17, 2017 Tuesday 08:30 AM