The Empire State Manufacturing Survey expanded strongly in October, growing at a three-year high. The composite index of general business conditions jumped from 24.4 in September to 30.2 in October, a pace not seen since September 2014. Activity in the New York Federal Reserve Bank’s district was buoyed by healthy monthly improvements in shipments (up from 16.2 to 27.5) and employment (up from 10.6 to 15.6), with hiring expanding at its fastest rate in eight years. At the same time, both new orders (down from 24.9 to 18.0) and the average workweek (down from 5.7 to zero) eased. Demand remained relatively robust, however, with 32.2 percent of respondents saying that orders had increased in this report.
Meanwhile, manufacturers in the New York region remained very upbeat about the next six months. The expectations composite index rose from 39.3 to 44.8, and it has averaged 41.2 over the past 12 months. In the 12 months prior to that, the average was 27.2, illustrating the acceleration in optimism seen for much of this year. Along those lines, growth in new orders (up from 43.7 to 44.8), shipments (up from 37.0 to 43.4) and employment (up from 13.8 to 17.2) strengthened in October to decent levels, with 55.4 percent of those completing the survey anticipating more sales in the months ahead. Pricing pressures (down from 42.3 to 41.4), capital expenditures (down from 24.4 to 21.9) and technology spending (down from 17.1 to 16.4) were also expected to grow strongly over the next six months, even with each decelerating slightly in this release.