New York Manufacturers Optimistic, But Pricing Pressures Accelerate

By March 15, 2012Economy

The Federal Reserve Bank of New York’s Empire State Manufacturing Survey rose from 19.5 in February to 20.2 in March. This represents a major turnaround from six months ago, in which manufacturers in the region were largely in contraction.

Many of the subcomponents of the index, though, were mixed. Measures for new orders and shipments eased slightly while still suggesting expansion for both. On the other hand, delivery times, inventories, employment and the average workweek all improved.

Inflationary pressures rose significantly in March. This was echoed in this morning’s producer price index release from the Bureau of Labor Statistics. The index for the prices paid for raw materials jumped from 25.9 in February to 50.6 in March. Further aggravating these pressures, the ability to pass these costs on to the consumer eased somewhat.

Looking to the next six months, manufacturers remain extremely positive, even with a modest slowing of the forward-looking business conditions index, down to 47.5 from 50.4 for the month. Overall, businesses are optimistic about future orders, shipments, employment and capital expenditures.

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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