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New York manufacturing index jumps in February

By Eric Reinhardt (ereinhardt@cnybj.com)

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Hits highest level since last July

An increase in new orders and prices paid for goods helped boost a monthly gauge of New York state’s manufacturing sector. 

The Empire State Manufacturing Survey general business-conditions index rose 9 points in February to 12.1, its highest level since July of last year. The result also easily beat economists’ expectations of 5.9, according to a survey by the Wall Street Journal.

The February reading — based on firms responding to the survey — indicates business activity “grew modestly” in New York, the Federal Reserve Bank of New York said in its Feb. 16 survey report.

A positive reading indicates expansion or growth in manufacturing activity in the state, while a negative index number shows a decline in the sector. 

The survey found 32 percent of respondents reported that conditions had improved over the month, while 20 percent said that conditions had worsened, the New York Fed said.

Survey details

The new-orders index rose 4 points to 10.8, indicating that orders increased, and the shipments index fell to 4.0, pointing to a small increase in shipments. 

Delivery times rose at the “fastest pace in a year,” and inventories were higher, the New York Fed said.

The index for number of employees was little changed at 12.1, indicating “ongoing modest” gains in employment, and the average-workweek index edged up to 9.0, signaling an increase in hours worked. 

The prices-paid index jumped 12 points to 57.8, a level last reached in 2011, pointing to a “sharp” increase in input prices. The prices-received index climbed 8 points to 23.4, its highest level in two years, showing a “pickup” in selling-price increases.

The index for future business conditions rose 3 points to 34.9, suggesting that firms “remained optimistic” about future conditions. 

The indexes for future new orders and shipments rose to similar levels. Respondents expect delivery times to lengthen and also expect inventories to increase in the months ahead. Both the future-prices paid and prices-received indexes were also “notably” higher. 

The capital-expenditures index rose to 28.6, its highest level in more than a year, and the technology-spending index rose to 23.4.

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. 

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