The New York Federal Reserve Bank observed little change in March from the progress reported in February. The Empire State Manufacturing Survey’s composite index of general business activity declined slightly from 10.0 to 9.2, but the larger story is that the gains made last month appear to have held up. After contracting for six straight months, the composite index has been positive for two, suggesting modest growth overall and a good sign that the economic environment has stabilized.
With that said, the pace of growth for orders and many other key components eased somewhat this month. The new orders index dropped from 13.3 to 8.2, with just over 47 percent suggesting that sales levels were unchanged from the month before. Similar findings were noted for shipments.
Employment growth remains sluggish, with the index decreasing from 8.1 to 3.2. Just 16.1 percent of respondents said that they had hired new workers in March, with 71 percent indicating no changes. The average employee workweek was unchanged on net.
Looking ahead six months, manufacturers in the New York Fed District remain more upbeat, with a slight pickup in optimism. The forward-looking composite index rose from 33.0 to 36.4, with higher measures for sales, shipments, employment, and capital investment rose. Inventories are anticipated to decline; whereas, pricing pressures are predicted to accelerate. Over half of those surveyed expect for raw material costs to rise in the months ahead.