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Empire State index jumps to highest level in nearly four years

By Eric Reinhardt


The Federal Reserve Bank of New York reported May 15 that its Empire State Manufacturing Survey general business-conditions index climbed nearly 18 points to 19, its highest level in nearly four years.

That easily surpassed the reading of about 5 that analysts were expecting, according to Yahoo Finance data.

The May index comes “on the heels of a rather weak reading of just 1.3 in April,” the New York Fed said in a news release.

About 37 percent of respondents reported that conditions had improved in the last month, while just 18 percent indicated that conditions had worsened, according to the release.

The month-over-month increase in the survey’s benchmark index is “meaningful,” says Randall (Randy) Wolken, president of the Manufacturers Association of Central New York (MACNY).

“I’d like to see it continue, at least at this level or continue to increase the next few months to really draw any significant conclusions,” says Wolken.

The new-orders index also rose 13 points from a negative reading last month to 10.4 in May. The shipments index climbed 14 points to 17.4, also a multi-year high, the New York Fed said.

“Both [are] really good current indicators of activity,” Wolken says.

The unfilled-orders index rose 12 points to -1.1, suggesting that regional manufacturers faced “little slack.”

The delivery-time index advanced to -1.1, a sign that delivery times didn’t change that much. And the inventories index rose 5 points to 2.2, indicating a slight increase in inventory levels.

Price indexes were “slightly lower,” suggesting a small degree of slowing in price increases, according to the news release. The prices-paid index fell 3 points to 19.8 and the prices-received index decreased 4 points to 6.6. 

Employment expanded “significantly,” according to the New York Fed, although the average-workweek index held steady at 2.2 and the index for number of employees rose 13 points to 20.9. 

“That tends to be a lagging indicator, hiring, because capital investments tend to come first,” Wolken says.

Indexes for the six-month outlook conveyed a high degree of optimism about future business conditions. 

The index for future general-business conditions rose 6 points to 44, its highest level in more than two years, with 53 percent of respondents expecting conditions to improve over the next six months. 

The future new-orders index climbed to 36.7, while the index for expected shipments fell 5 points to 33.8. 

Indexes for expected prices were “little changed,” the New York Fed said, with the future prices-paid index inching down just slightly to 31.9 and the index for future prices received holding steady at 14.3. 

The index for expected number of employees dipped 5 points to 17.6, and the future average-workweek index dropped to -3.3. 

The capital-expenditures index fell 4 points but, at 19.8, suggested that manufacturers still expected capital spending to increase “moderately,” while the technology-spending index retreated 10 points to 4.4, pointing to a slowing in what firms expected to spend on technology.

The New York Fed distributes the Empire State Manufacturing Survey on the first day of each month to the same pool of about 200 manufacturing executives in New York. 

On average, about 100 executives return responses, it says.       

Contact Reinhardt at

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