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empire state manufacturing survey

NY Fed: Manufacturing Activity Expanded Slightly for the First Time since July

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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. Read More

NY Fed: Manufacturing Activity Has Contracted in 8 of the Past 9 Months

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The Empire State Manufacturing Survey has reflected contracting activity in eight of the past nine months. The composite index of general business conditions improved somewhat from -19.4 in January to -16.6 in February, but this data continues to indicate net decreases for the region’s manufacturers. The pace of the decline eased for a number of measures, albeit with still-strong decreases in activity. This includes new orders (up from -23.5 to -11.6), shipments (up from -14.4 to -11.6) and the average workweek (up from -6.0 to -5.9). On the other hand, employment (up from -13.0 to -1.0) has mostly stabilized, even as it remains slightly negative.

Overall, this report shows just how challenged the manufacturing sector is right now for business leaders in the New York Federal Reserve Bank’s district. The strong dollar and global economic weaknesses have weighed heavily on demand and production. Indeed, 34.1 percent of respondents said that new orders fell for their firms in February, with 22.5 percent noting increases. Nonetheless, this represented some progress from the January release, where 46.1 percent observed declines in new orders. Read More

NY Fed: Manufacturing Activity Contracted for the Fourth Straight Month

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The Empire State Manufacturing Survey reflected contracting levels of activity for the fourth straight month in November. The composite index of general business conditions improved slightly from -11.4 in October to -10.7 in November, even as this measure has been in solid negative territory since July. The underlying data were also negative across-the-board, even as there was some easing in the pace of decline for most of them. This included new orders (up from -18.9 to -11.8), with one-third of respondents saying that their sales had declined for the month, down from 37.2 percent who said the same thing in the prior report. At the same time, 21.4 percent of those completing the survey cited increased new orders in November, up from 18.3 percent in October. Data for shipments (up from -13.6 to -4.1) were similar. Read More

NY Fed: Manufacturing Activity Continued to Contracted Sharply in September

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The Empire State Manufacturing Survey continued to reflect sharp contractions in activity for the second straight month. The composite index of general business conditions was -14.7 in September, only marginally better than the -14.9 seen in August. Each were the lowest levels since April 2009, and they reflect persistent softness in the sector in the New York Federal Reserve Bank’s district. Indeed, the underlying data were negative across-the-board, even with some easing in a few measures in the rate of decline. This included new orders (up from -15.7 to -12.9) and shipments (up from -13.8 to -8.0), with more than one-third of respondents citing declining demand for the month.   Read More

NY Fed: Manufacturing Orders Contracted in April

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The Empire State Manufacturing Survey contracted in April, ending three straight months of expansion in the district. The composite index of general business conditions from the New York Federal Reserve Bank declined from 6.9 in March to -1.2 in April. The decline stemmed from reduced new orders (down from -2.4 to -6.0), which decreased at a faster pace for the month. Nearly one-third of those taking the survey said that their new orders were lower in April, up from 27.5 percent in March. The index for the average employee workweek also narrowed, down from 5.2 to -4.3, but with 78.8 percent of respondents suggesting that the workweek was unchanged.  Read More

NY Fed: Manufacturers Expanded in March, but at a Slower Pace

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The Empire State Manufacturing Survey reported expansion in the sector for the third straight month in the district, but at a slower pace. The composite index of general business conditions from the New York Federal Reserve Bank has declined from 10.0 in January to 7.8 in February to 6.9 in March. The underlying data suggest a mixed picture for the sector. The pace of shipments (down from 14.1 to 7.9) eased for the month, but continued to grow at a decent rate. In contrast, growth in new orders (down from 1.2 to -2.4) slipped into negative territory. Roughly one-quarter of survey respondents said that their orders had increased for the month, with 27.5 percent noting declines. As such, these data mirror other indicators which reflect current headwinds in the economy. Read More

Monday Economic Report – August 18, 2014

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Here is the summary for this week’s Monday Economic Report:

While geopolitical events continue to provide significant downside risks to the economy, recent data suggest that manufacturers in the United States are faring better this summer. Manufacturing production increased 1.0 percent in July, helping to lift the year-over-year pace of manufacturing output to 4.9 percent, its fastest annual pace since June 2012. Last month’s gain stemmed largely from increased motor vehicle production, with all but three of the major manufacturing sectors notching higher output levels for the month. At the same time, the utilization rate for manufacturers increased to 77.8 percent, nearly reaching pre-recessionary capacity levels.

Similarly, the Empire State Manufacturing Survey reflected strong growth in August, albeit less so than the robust levels observed in July. More importantly, respondents to the New York Fed’s survey were significantly more upbeat, with roughly 60 percent anticipating higher sales and output over the next six months. This study also reported that approximately 30 percent of manufacturers in its district planned to hire more workers and invest in additional capital expenditures in the coming months. This is welcome news, and it was largely consistent with the recent pickup in the labor market. Manufacturing job openings increased in June to their highest level in two years, with net hiring also accelerating. Of course, we already knew that to some extent. The most recent employment data found that manufacturers hired an additional 22,000 workers on average from May to July.

Meanwhile, the European economy has shown signs of backtracking, with real GDP in the Eurozone remaining unchanged in the second quarter. Germany’s economy contracted by 0.2 percent, helping to push the continent’s growth figure lower, but Italy (also down 0.2 percent) and France (flat for the second straight quarter) were also weak. In addition, industrial production has decreased in three of the past four months, with output unchanged year-over-year. We will get our first look at August purchasing managers’ index (PMI) data this week. The Markit Eurozone Manufacturing PMI report in July provided mixed news, with activity expanding for 13 straight months but growth continuing to ease over the course of this year. The latest data suggest that Europe’s economic challenges are still not behind them.

To some extent, that is true in the United States as well. We have seen improvements in a number of economic indicators, and yet, there are also persistent worries about future growth. Some of this could stem from global anxieties, but it could also be a function of disappointment with the lack of growth in the first half of the year. Preliminary consumer sentiment data from the University of Michigan and Thomson Reuters appears to pick up on this nuance, with Americans less confident once again in their forward-looking expectations. Indeed, retail sales data also reflect cautiousness on the part of the consumer, with spending unchanged in June.

This week, we will get additional insights about the health of the manufacturing sector worldwide. In addition to new PMI data for Europe, Markit will also release flash reports for China, Japan and the United States. While China’s economy had begun to stabilize in July, last week we learned that Japan’s real GDP contracted by 1.7 percent in the second quarter, or 6.8 percent year-over-year. Closer to home, the Federal Reserve will release the minutes of its July 29–30 Federal Open Market Committee meeting. Analysts will be looking for clues about when the Fed plans to start normalizing short-term rates. The Fed received good news last week with an easing in producer prices in July from recent highs, and this should help to alleviate some of the immediate pressure from inflation hawks, at least for now. Other highlights this week include the latest data on consumer prices, housing starts and permits, leading indicators and Philadelphia Fed manufacturing sentiment.

Chad Moutray is the chief economist, National Association of Manufacturers. 

manufacturing production - aug2014

Empire State Survey Shows Manufacturing Growth at a Four-Year High in July

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The Empire State Manufacturing Survey from the New York Federal Reserve Bank increased to its highest level in July since April 2010. The composite index of general business conditions rose from 19.3 in June to 25.6 in July, suggesting that manufacturing activity expanded strongly in the month. The jump in the headline figure was due largely to a drop in the percentage of respondents saying that conditions were worse, down from 21.1 percent in June to 15.0 percent in July. In contrast, 40.6 percent of manufacturers taking the survey said that they felt business was improving, up just slightly from the 40.4 percent who said the same thing the month before.

The underlying data were mostly positive, particularly for shipments (up from 14.2 to 23.6) and employment (up from 10.8 to 17.1). New orders also edged somewhat higher, up from 18.4 to 18.8, mostly from a drop in those saying that sales were lower. Yet, the data also had a couple weaknesses, with the average workweek (down from 9.7 to 2.3) easing a bit and pricing pressures (up from 17.2 to 25.0) picking up.

Looking ahead six months, manufacturers in the New York Fed district continued to be mostly optimistic, albeit with less enthusiasm than the month before. The forward-looking composite index decreased from 39.8 to 28.5, but the data still suggest relatively healthy gains moving forward. Growth rates were slower for a number of indicators, including new orders (down from 44.5 to 25.6), shipments (down from 45.2 to 24.6), hiring (down from 20.4 to 17.1) and capital spending (down from 11.8 to 9.1).

In all, 38.2 percent of respondents anticipate sales to be higher six months from now, with 49.2 percent expanding no changes. Other highlights include a slight increase in technology spending plans (up from 3.2 to 10.2), and reduced levels for inventories (down from 6.5 to -4.6) and the average workweek (down from zero to -4.6).

Chad Moutray is the chief economist, National Association of Manufacturers. 

Empire State Survey: Significant Jump in Manufacturing Activity in May

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The Empire State Manufacturing Survey from the New York Federal Reserve Bank said that manufacturing activity unexpectedly jumped significantly in May. The composite index of general business conditions soared from 1.3 in April to 19.0 in May. Indeed, the percentage of respondents saying that overall conditions had improved in the month rose from 25.7 percent in April to 36.8 in May. This suggests that the sector has begun to recover from softness earlier in the year, with growth in May at its fastest pace since June 2010.

Several of the other data points were up strongly, as well. For instance, new orders shifted from a slight contraction to decent growth (up from -2.8 to 10.4), and shipments reflected healthy gains (up from 3.2 to 17.4). Employment (up from 8.2 to 20.9) made one of the largest increases, with hiring growth at its quickest pace since May 2011. This was definitely good news, with 30.8 percent of those manufacturers taking the survey saying that they added workers in May (up from 18.4 in April). Still, the average employee workweek suggested only modest growth (up from 2.0 to 2.2).

Pricing pressures remained elevated, but eased somewhat for the month (down from 22.5 to 19.8). While 23.1 percent noted price increases for raw materials, nearly 74 percent noted no change in costs this month.

Looking ahead six months, manufacturers in the New York Fed district continue to be mostly optimistic, but the news was somewhat mixed. Over half of respondents anticipate increased new orders in the coming months, up from 44.2 percent who said the same in April. Similarly upbeat assessments were seen for shipments, with a generally positive outlook for growth in both hiring and capital spending.

The pace of some of these indicators decelerated a bit in May, however. For instance, spending on capital investments (down from 23.5 to 19.8) and technology (down from 14.3 to 4.4) both slowed. Likewise, while hiring is expected to increase strongly, it also eased somewhat (down from 22.5 to 17.6), and the anticipated workweek moved into a slight contraction (down from 1.0 to -3.3).

Chad Moutray is the chief economist, National Association of Manufacturers. 

Empire State Survey: Manufacturing Activity Picked Up Slightly in March

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Sentiment edged somewhat higher in March, according to the Empire State Manufacturing Survey from the New York Federal Reserve Bank. The composite index of general business conditions rose from 4.5 in February to 5.6 in March. Nonetheless, overall optimism has taken a hit over the past couple months, mostly due from poor weather conditions, with the index down from 12.5 in January.

Weather wreaked havoc in February, with the new orders index slightly contracting (-0.2). In March, sales shifted to modest gains once again (3.1), which was a good sign. Just over 30 percent of respondents said that their new orders increased in the month, with 27.3 percent noting declines. Shipments (up from 2.1 to 4.0) and the average workweek (up from 3.8 to 4.7) also improved. In addition, pricing pressures for raw materials decelerated a bit (down from 25.0 to 21.2), with 74.1 percent saying that their costs were unchanged in March.

Meanwhile, the pace of hiring slowed somewhat (down from 11.3 to 5.9), but employment growth has been positive for three straight months with mostly modest gains. Still, 68.2 percent of those taking the survey said that hiring was constant for the month.

Looking ahead six months, manufacturers in the New York Fed district continue to be mostly optimistic, albeit less so than last month. Nearly 48 percent of respondents anticipate increased new orders in the coming months, down from 55.0 percent who said the same in February. Similarly upbeat assessments were seen for shipments, with a generally positive outlook for modest growth in both hiring and capital spending. Indeed, these data support the view that the current weaknesses will be temporary, particularly if the more-positive view of future growth comes to fruition.

Chad Moutray is the chief economist, National Association of Manufacturers.