January 2018 Empire State Manufacturing Index Little Changed

The Empire State Manufacturing Survey insignificantly declined but remains strongly in expansion. It was at expectations. Important internals were positive.

Analyst Opinion of Empire State Manufacturing Survey

I am not a fan of surveys – and this survey jumps around erratically – but has been relatively steady for the last year.

Expectations from Bloomberg / Econoday were for a reading between 15.0 to 20.0 (consensus 18.0) versus the 17.7 reported. Any value above zero shows expansion for the New York area manufacturers.

New orders subindex of the Empire State Manufacturing declined but remainsin expansion, whilst the unfilled orders sub-index improved and is now in expansion..

This noisy index has moved from +6.5 (January 2017), 18.2 February, +16.4 (March), +5.2 (April), -1.0 (May), 19.8 (June), 9.8 (July), 25.2 (August), 24.4 (September), 30.2 (October), 19.4 (November), 18.0 (December) – and now 17.7.

As this index is very noisy, it is hard to understand what these massive moves up or down mean – however this regional manufacturing survey is normally one of the more pessimistic.

Econintersect reminds you that this is a survey (a quantification of opinion). Please see caveats at the end of this post. However, sometimes it is better not to look to deeply into the details of a noisy survey as just the overview is all you need to know.

From the report:

Business activity continued to grow at a solid clip in New York State, according to firms responding to the January 2018 Empire State Manufacturing Survey. The headline general business conditions index, at 17.7, was little changed from last month’s level. The new orders index and the shipments index both showed ongoing growth, although at a slower pace than in December. Unfilled orders and delivery times increased slightly, and inventory levels were higher. Labor market conditions pointed to a modest increase in employment and steady workweeks. Both input prices and selling prices increased at a faster pace than last month. Firms remained very optimistic about future business conditions and capital spending plans were robust.

Conditions Remain Favorable

Manufacturing firms in New York State reported that business activity continued to expand strongly. The general business conditions index was little changed at 17.7. Thirty-two percent of respondents reported that conditions had improved over the month, while 15 percent reported that conditions had worsened. The new orders index moved down seven points to 11.9, and the shipments index declined nine points to 14.4—readings that indicated ongoing growth in orders and shipments, although at a slower pace than last month. The unfilled orders index climbed into positive territory and, at 4.3, indicated a small increase in unfilled orders. The delivery time index was 3.6, indicating that delivery times lengthened somewhat, and the inventories index rose to 13.8, a sign that inventory levels grew moderately. Price Increases Pick