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N.Y. manufacturing index rises in July to highest mark in four years

By Eric Reinhardt

Date:

The Federal Reserve Bank of New York reported July 15 that its Empire State Manufacturing Survey general business-conditions index climbed more than six points to 25.9 in July, its highest level in more than four years.

In its news release, the New York Fed said business conditions “improved significantly” for a third consecutive month for New York manufacturers.

The index in May rose nearly 18 points to 19.0, its highest level in nearly four years and then inched up 0.3 points to 19.3 in June.

The July survey found 41 percent of respondents reported that conditions had improved over the month, while 15 percent reported that conditions had worsened.

“It matches up well with my experiences that the manufacturing sector is seeing incremental improvement in New York and that continues to remain positive,” says Randall Wolken, president of the Manufacturers Association of Central New York (MACNY).

The new-orders index was “little changed” at 18.8, while the shipments index rose nine points to 23.6, according to the New York Fed.

Both indexes were at their highest levels since early 2010, it added.

“New orders remain high and [the] shipment index actually rose, so both of these indexes are at multi-year highs,” says Wolken.

The unfilled-orders index fell six points to -6.8, suggesting that fewer orders remained unfilled.

The delivery-time index fell two points to -1.1, and the inventories index fell 13 points to -3.4, pointing to a small decline in inventory levels.

The indexes for both prices paid and prices received were higher this month, indicating a “pickup in the pace” of price increases, the New York Fed said.

The prices-paid index rose eight points to 25.0, and the prices-received index inched up three points to 6.8.

Labor market conditions continued to improve, with indexes pointing to a “solid” increase in employment levels and a slight increase in hours worked.

The index for number of employees climbed six points to 17.0, a level that indicated a “solid” increase in employment levels, according to the New York Fed.

The average-workweek index retreated seven points to 2.3, and pointed to a slight increase in hours worked.

“When [firms] start adding people, and then, they’re also adding a slight increase in hours worked, these are all positive indicators,” says Wolken.

Optimism about future slips
Despite the steep gains in many of the survey’s indexes for current conditions, optimism about future conditions, while still strong, diminished, according to the New York Fed.

The index for future general-business conditions fell 11 points to 28.5.

The future new-orders index dropped 19 points to 25.6, and the future-shipments index tumbled 21 points to 24.6.

The index for expected number of employees fell three points to 17.1, and the future average-workweek index turned “slightly negative,” according to the New York Fed.

The capital-expenditures index fell three points to 9.1, and the technology-spending index rose seven points to 10.2.

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 ereinhardt@cnybj.com

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