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 9/17/07 For Sep 2007 | ||||||||||||
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Highlights
A manufacturing report that had been showing the most growth is now showing slower growth, as the Empire State index fell back from 25.1 in August to 14.7 in September. New orders fell back nearly 10 points to 13.6 while backlog orders show contraction at -2.1. Shipments showed only slight growth at 5.1, down from 28.8 in August, while the employee workweek dropped to 9.6 from 16.1. The index for the number of employees did rise, to 18.2 vs. 11.6, but weakness in orders and shipments don't point to further gains ahead.
Price readings showed significant cost pressures with the prices paid index up 7 tenths to 35.1, and prices received showing new pressure at 11.7 vs. 3.2. The readings are the first to suggest that $80 oil is leading to a new round of cost increases.
The Empire State report is now falling more in line with other manufacturing data showing slowing to flat rates of growth including the ISM and Philadelphia Fed reports and also the Federal Reserve's industrial production, which showed a 0.3 percent contraction for manufacturing in August. BLS payroll data showed sharp contraction in August. Financial markets, awaiting tomorrow's FOMC decision, showed little reaction to the data. Tomorrow's PPI data and Thursday's Philadelphia Fed report will offer the next looks at the manufacturing sector.
The Empire State manufacturing index came in at a healthy 25.1 in August, the third straight reading between 25 and 27 (zero is the breakeven point). New orders were very strong at 22.2 as were shipments at 28.8. The Empire State report has proven stronger than other regional manufacturing reports and stronger than the national ISM report. This report will be the last information for the Fed to review on the manufacturing sector before its Tuesday FOMC meeting.
Empire State Manufacturing Survey Consensus Forecast for September 07: 20.0
Range: 7.0 to 23.0
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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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