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Empire State Manufacturing Survey Conditions Continue Modest Decline
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The December Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to decline at a modest pace. The general business conditions index was negative for a fifth consecutive month, falling three points to -8.1. The new orders index dropped to -3.7, while the shipments index declined six points to 8.8. At 16.1, the prices paid index indicated that input prices continued to rise at a moderate pace, while the prices received index fell five points to 1.1, suggesting that selling prices were flat. Employment indexes pointed to weaker labor market conditions, with the indexes for both number of employees and the average workweek registering values below zero for a second consecutive month. Indexes for the six-month outlook were generally higher than last month, although the level of optimism remained at a level well below that seen earlier this year.
In a series of supplementary questions, firms were asked about past and expected price changes overall and in a number of categories. In general, respondents predicted that prices paid for most budget categories would increase by about the same rate in calendar 2013 as in 2012. The steepest price increases—both actual and expected—were reported for employee benefits, up 6.4 percent, on average, in 2012 and expected to be up 7.2 percent in 2013. Respondents were also asked how they expected their selling prices to change over the next year. The average expected increase in the current survey was 1.0 percent—down from 1.8 percent in last year's survey and 3.2 percent in the December 2010 survey. Manufacturers were also asked about superstorm Sandy's recent and expected effects on revenues: Down-state establishments estimated that revenues in October and November were 7 percent and 5 percent lower, respectively, than they otherwise would have been.
Business Conditions Decline for a Fifth Consecutive Month
Continuing a five-month streak of negative readings, the general business conditions index fell three points to -8.1—a sign that business activity declined at a modest pace for New York manufacturers in December. Fifteen percent of respondents reported that conditions had improved over the month, while 23 percent reported that conditions had worsened. After rising above zero last month, the new orders index fell seven points to -3.7, pointing to a small decline in the demand for manufactured goods. The shipments index gave back some of its gains from last month, declining six points to 8.8—evidence that shipments rose at a slower pace than in November. The unfilled orders index climbed five points to -6.5. The delivery time index was little changed at -2.2. The inventories index was also similar to last month's reading and, at -11.8, indicated that inventory levels were somewhat lower.
Labor Market Conditions Remain Weak
The prices paid index inched up two points to 16.1, suggesting that input price increases remained moderate in December. The prices received index fell five points to 1.1, indicating that selling prices were generally flat over the month. Employment indexes, negative for a second consecutive month, pointed to weaker labor market conditions. The index for number of employees rose five points to -9.7, while the average workweek index declined three points to -9.9.
Outlook Improves Somewhat
Indexes for the six-month outlook remained somewhat restrained compared with their levels earlier this year, though most future indexes were higher than in November. The future general business conditions index rose six points to 18.9. The future new orders index increased more significantly, climbing eleven points to 32.3, and the future shipments index rose four points to 34.4. The future prices paid index advanced a sharp twelve points to 51.6, suggesting that the pace of increase in input prices is expected to pick up in the months ahead. The future prices received index also climbed, rising ten points to 25.8—an indication that selling price increases were expected to accelerate. Future employment indexes were positive and higher than last month, suggesting that employment levels and the average workweek were expected to rise. The capital expenditures index climbed four points to 12.9, and the technology spending index inched down to 4.3.
Posted: December 17, 2012 Monday 08:30 AM