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Empire State Manufacturing Survey Conditions improvement was less widespread
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The August 2014 Empire State Manufacturing Survey indicates that business conditions continued to improve for New York manufacturers, but the improvement was less widespread than in the previous month. The headline general business conditions index retreated eleven points to 14.7, after reaching a four-year high in July. The new orders index slipped almost five points to 14.1, while the shipments index edged up a point to 24.6—a multiyear high. The unfilled orders index inched down one point to -8.0. The indexes for both prices paid and prices received were up slightly, indicating a marginal pickup in the pace of price increases. Labor market conditions were mixed, with the employment index declining slightly but the index for hours worked rising modestly. Most of the indexes for the six-month outlook rebounded sharply, after slipping in the July survey; a number of them reached multiyear highs, signaling increasingly widespread optimism about the near-term outlook.
General Business Conditions Index Retreats from Four-Year High
Business conditions improved for a fourth consecutive month for New York manufacturers, although the improvement was less widespread than last month’s, according to the August 2014 survey. The general business conditions index retreated eleven points to 14.7, after climbing to a four-year high in July. Thirty-one percent of respondents reported that conditions had improved over the month, while 17 percent reported that they had worsened. The new orders index slipped nearly five points to 14.1, but the shipments index edged up one point to 24.6—its highest level since March 2010. The unfilled orders index eased back to -8.0, pointing to a slow but steady lessening in backlogs. The delivery time index fell five points to -5.7, and the inventories index fell another 11 points to -14.8, pointing to a noteworthy drawdown of inventories.
Mixed News on Employment
Both price indexes edged up this month, suggesting a marginal pickup in the pace of price increases. The prices paid index rose two points to 27.3, and the prices received index inched up one point to 8.0. Labor market conditions were mixed but continued to improve overall. The index for number of employees slipped three points to 13.6, suggesting a slight pullback in the pace of hiring. However, the average workweek index rose six points to 8.0, signaling a slight increase in hours worked.
Increasingly Widespread Optimism
Despite the pullback in most of the survey’s indexes for current conditions, optimism about the near-term outlook grew increasingly widespread. The index for future general business conditions climbed eighteen points to 46.8—its highest level in two-and-a-half years. The future new orders index surged twenty-five points to 50.4, and the future shipments index soared thirty points to 54.5. The index for expected number of employees rose six points to 22.7, and the future average workweek index edged up to zero. The capital expenditures index jumped nine points to 18.2, and the technology spending index inched up to 12.5.
Posted: August 15, 2014 Friday 08:30 AM