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Empire State Manufacturing Survey Conditions Expands Slower
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The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved in May, but at a slower pace than in April. The general business conditions index fell ten points to 11.9. The new orders index declined five points to 17.2, and the shipments index slipped three points to 25.8. The inventories index climbed to 10.8, its highest level in a year. The prices paid index rose to 69.9, its highest level since mid-2008, while the prices received index held firm at 28.0. Future indexes continued to convey a high level of optimism about the six-month outlook, although prices are widely expected to rise.
In a series of supplementary questions, firms were asked about past and expected changes in both their input prices (prices paid) and selling prices (prices received). Respondents estimated that the prices they paid rose by 8.1 percent, on average, over the past twelve months—up from 5.9 percent in last May’s survey. Looking ahead to the next twelve months, respondents on average predicted a price rise of 5.6 percent. Firms reported considerably smaller increases in prices received: the average respondent cited a 1.9 percent increase in selling prices over the past year (down from 2.9 percent in the May 2010 survey) and an expected increase of 3.6 percent for the year ahead.
Activity Expands, but at a Slower Pace
The general business conditions index was positive in May, indicating that business activity continued to expand over the month, but the level of the index fell ten points to 11.9, a sign that the pace of growth slowed. The change was driven by a decline in the share of businesses reporting that conditions improved over the month—from 35 percent in April to 23 percent in May. The new orders index was also positive but fell five points to 17.2, indicating that orders expanded at a somewhat slower pace this month. The shipments index slipped a couple of points, to 25.8. The unfilled orders index continued to climb, as it generally has done since November, reaching 9.7 after rising seven points. The delivery time index rose three points to 2.2. The inventories index climbed twelve points to 10.8, its highest level in a year, suggesting that inventory levels rose in May.
Posted: May 16, 2011 Monday 08:30 AM