The New York Federal Reserve Bank’s Empire State Manufacturing Survey observed a rebound in activity in February, ending six straight months of contraction. The composite index of general business conditions rose from -7.8 in January to 10.0 in February. The percentage of those citing reduced conditions declined from 33.7 percent to 18.7 percent, with the bulk of those responses shifting to a more neutral viewpoint. This suggests that while attitudes were definitely more positive this month, there remains some degree of caution about the larger macroeconomic picture.

Nonetheless, the larger story is the increase in manufacturing activity in February, and the principle driver of these higher figures was higher sales. The index for new orders increased from -7.2 to 13.3, a significant shift. Indeed, the percentage of businesses with higher sales this month increased from 27.9 percent in January to 35.9 percent in February. Similar responses were seen for shipments and employment. Even with the faster pace of hiring, though, it should be noted that almost 72 percent of manufacturers did not change their employment levels. As we have seen in other indicators, hiring continues to lag other measures even as other measures have started to improve.

This more-positive assessment flows into the forward-looking data, as well. The index of general business conditions based on the respondents’ future expectations rose from 22.4 to 33.1, with roughly half of those surveyed anticipating better conditions six months from now. Measures for new orders, shipments, employment, and capital spending were all higher. Inventories are not expected to change, and pricing pressures should remain elevated.

Chad Moutray is chief economist, National Association of Manufacturers.

The New York Federal Reserve Bank’s Empire State Manufacturing Survey reported contracting levels of activity for four straight months. The composite index edged slightly higher, from -6.2 in October to -5.2 in November, but it remains in negative territory, suggesting a contraction. The percentage of respondents suggesting that business conditions had improved in the past month dropped from 24.6 percent to 19.1 percent, with almost 57 percent of manufacturers saying that conditions were the same. Uncertainties in the marketplace are forcing a lot of business leaders into a wait-and-see posture, it seems.

Despite the increased levels of anxiety about the overall business climate, many of the underlying data points reflect some improvements from the previous month. For instance, the index for new orders rose from -9.0 to 3.1, a pretty sizable gain and a movement from contraction to a slight expansion. Shipments also had progress, up from -6.4 to 14.6. Nonetheless, increased activity has not translated into more hiring. Measures for employment and the average workweek both weakened, with the index for number of employees dropping from -1.1 to -14.6. Over one-quarter of respondents now say that they have fewer employees this month than last, which is not a good sign.

The hesitance to hire could in part be influenced by a weakening of the perceived economic environment over the next six months. The forward-looking general business conditions index fell from 19.4 to 12.9. To be fair, this still indicates modest growth in the coming months, which is reflected in higher new orders, shipments, and capital spending data. Almost 44 percent of manufacturers in the New York region, for example, expect their sales to increase moving into 2013, with one-third anticipating no change. Once again, though, this does not mean more employment. The number of employees over that time frame is expected to slightly shrink, with the index down from zero to -1.1.

In summary, the Empire State survey is a mixed bag. New orders and shipments have improved in November, with some measures of activity expected to continue to grow moving into 2013. Yet, it is also clear that there are a lot of anxieties out there. Manufacturers’ perceptions of business conditions remain negative, dragging expectations for future growth lower. Moreover and perhaps reflecting the uncertain market right now, these businesses are not ready to increase their hiring. This suggests that manufacturers are not yet convinced that the economy is on a firm footing.

Chad Moutray is chief economist, National Association of Manufacturers.