The Empire State Manufacturing Survey stabilized in March, with the headline index expanding for the first time since July. The composite index of general business conditions increased from -16.6 in February to 0.6 in March. This suggests that manufacturing activity has stabilized in the district, albeit with lingering challenges. New orders (up from –11.6 to 9.6) and shipments (up from -11.6 to 13.9) both shifted into positive territory in March, with modest growth after several months of declines. The percentage of respondents suggesting that their sales had risen for the month rose from 22.5 percent in February to 34.9 percent in March. Still, one-quarter of those completing the survey noted declining new orders in March, with 39.8 percent observing no change.
Even with some progress in March, the labor market data remained soft. The index for employment (down from -1.0 to -2.0) declined further for the month. Yet, the average workweek (up from -5.9 to 2.0) expanded for the first time since July, mirroring the overall index. At the same time, inventories (down from zero to -6.9) contracted once again.
Meanwhile, manufacturers in the New York Federal Reserve Bank’s district were more upbeat about the next six months. The forward-looking composite index jumped from 14.5 to 25.5, its highest level in three months, and most of the key subcomponents were higher in March. This included new orders (up from 22.2 to 39.0), shipments (up from 23.8 to 33.3), the average workweek (up from zero to 5.0), capital expenditures (up from 12.9 to 15.8) and technology spending (up from 5.9 to 9.9). Indeed, 52.5 percent of respondents expect new orders to increase in the months ahead, which is encouraging. Hiring (down from 16.8 to 12.9) was also expect to rise modestly, but at a slower pace than seen in the prior report.
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