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 5/15/08 For May 2008 | ||||||||||||
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Highlights
The Empire State report indicates that manufacturing activity in the New York Fed's district is flat, confirming similar results in a string of ISM manufacturing surveys on the national level. The Empire State's general business conditions index fell nearly 4 points in May to -3.2 to indicate a marginal month-to-month decline. But this reading along with others in the report are too close to the breakeven number of zero to make any greater assumption than simply that conditions are flat. New orders slipped fractionally to -0.5 while backlog orders improved slightly to -4.4. There are no distortions coming from the supply chain where inventories are contracting and delivery times are unchanged. Employee data are also at about zero to indicate no significant change in employment levels or the workweek.
But the pressure on input costs is definitely significant as the prices paid index jumped more than 12 points to 69.6 -- a record in seven years of data that easily passes a 60.6 reading in November 2005 when Katrina-related shortages were driving up prices. But prices received showed less pressure, falling more than 5 points to 15.2 to indicate that fewer manufacturers in the region are passing costs through.
Today's report doesn't offer the best news on the manufacturing sector, only that an upturn isn't underway at least in the New York area. One positive in the report is a rise in the 6-month outlook, up more than 4 points to 23.9 and offering a hopeful sign that optimism among manufacturers is on the rise. The report may point to strength in the Philadelphia Fed's manufacturing survey to be released at 10:00 this morning and which has been showing significant weakness. Industrial production data for April, which includes a large manufacturing component, will be released at 9:15 a.m. ET.
The April Empire State manufacturing index indicated that manufacturing may be stabilizing in the New York State area. The general business conditions index improved to 0.6 in April from a severe contraction reading of minus 22.2 in March. Also, shipments soared to 17.5 from minus 5.2 in March with new orders stabilizing, at zero versus minus 4.7 the prior month. While output and the outlook for production stabilized, inflation numbers did not. Input prices jumped another 7 points to 57.3 in April with greater pressure appearing for final goods which jumped 5 points to 20.8.
Empire State Manufacturing Survey Consensus Forecast for May 08: 0.00
Range: -10.00 to 5.00
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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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