The New York Fed conducts this monthly survey of manufacturers in New York State. Participants from across the state represent a variety of industries. On the first of each month, the same pool of roughly 175 manufacturing executives (usually the CEO or the president) is sent a questionnaire to report the change in an assortment of indicators from the previous month. Respondents also give their views about the likely direction of these same indicators six months ahead. This index is seasonally adjusted using the Philadelphia Fed's seasonal factors because its own history is not long enough with data only going back a couple of years. (Federal Reserve Bank of New York) Why Investors Care
| Released on 7/16/07 For Jul 2007 | ||||||||||||
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Highlights
The Empire State manufacturing index held onto its big gain in June, at 26.5 in July vs. June's 25.8. The new orders index, up more than 9 points to 26.5, points strongly to new gains in August. The report in fact is strong throughout, with solid readings for shipments (29.2 vs. 29.8), unfilled orders (2.5 vs. -2.1), and employment (11.4 vs. 3.4).
Other readings included a big drawdown in inventories which fell to -19.8 vs. 3.2. Given the strength in shipments, the drawdown is no doubt the result of increased production. The need to rebuild inventories is yet another factor pointing to strength ahead.
Despite high energy prices and rising demand, price readings were tamer than in June with prices paid down about 8 points to 34.6 and prices received down about 1 point to 8.6.
Diffusion surveys for the manufacturing sector, including Empire State and led by the ISM, have been pointing for two months to new strength following flat conditions earlier in the year. The Federal Reserve's industrial production, out on Tuesday, has so far been lagging the diffusion surveys. Treasuries eased and the dollar firmed in immediate reaction to this morning's numbers.
The Empire State manufacturing index rose sharply in June to 25.8 from 8.0 in May and 3.8 in April. New orders and shipments indexes jumped notably for the month. Other manufacturing surveys have come in strong, confirming a similar pattern for manufacturing in June - including the Chicago NAPM, the Philly Fed, and ISM. Markets will be watching to see if this strength continues as suggested by the surveys' orders data.
Empire State Manufacturing Survey Consensus Forecast for July 07: 17.5 Range: 4.5 to 22.0
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The Empire State Manufacturing Survey has a much shorter history than the Philadelphia Fed's business outlook survey. The two series tend to move in tandem much of the time, although not each and every month. They are both considered leading indicators for the ISM manufacturing survey. |
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