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 1/15/08 For Jan 2008 | ||||||||||||
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Highlights
Costs are going up while orders have turned flat, according to the results of the Empire State report which will deepen concerns over the health of the nation's manufacturing sector. The main index was little changed at 9.0 in January vs. December's 9.8, but new orders are now at zero vs. 13.2 in December. Delivery times improved and inventories continued to contract, consistent with slowing conditions.
Price data offer more bad news showing input costs rising to 40.2 vs. 35.0 and output prices rising to 18.3 vs. 12.5. But slower demand itself may begin to offset some of these pressures, which of course are centered in energy.
Today's data will lower expectations for Thursday's manufacturing report from the Philadelphia Federal Reserve and may limit relief from softer readings in this morning's PPI report.
The Empire State manufacturing index fell back a very steep 17 points in December for a 10.3 reading that points to only a moderate rate of growth in the area's manufacturing sector. With the ISM and Philly Fed indexes recently turning negative and with December manufacturing hours falling, markets will be looking for more current data on whether this sector is in recession. But we may get one more month in positive territory as in December the new orders index for the Empire State survey was still moderately positive even though it fell back to 14.3 from November's 24.5.
Empire State Manufacturing Survey Consensus Forecast for January 08: 9.75
Range: 7.00 to 20.0
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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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