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 8/15/08 For Aug 2008 | ||||||||||||
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Highlights
Flat conditions in New York's manufacturing region is actually good news. The Empire State index edged into positive territory in August to 2.8 vs. July's -4.9. Key readings are mostly near the neutral level of zero showing little month-to-month change: new orders -2.2 vs. 8.3; shipments -0.9 vs. 13.5; inventories 5.6 vs. -14.7. Unfilled orders are soft at -9.0 vs. -8.4, perhaps hinting at some cancellations. Employment readings are steady with the number of employees index at -4.5 vs. -6.3 and the workweek at 1.1 vs. -8.4. Price data are elevated but do not show increasing pressure: input prices 65.2 vs. 77.9, output prices 32.6 vs. 32.6.
One big positive is a bounce back in the six-month outlook to 34.6 vs. an unusually low reading in July of 15.6. The dollar firmed slightly as did stock futures in immediate reaction to the report which is likely to raise hope for a bounce back in next week's more closely watched manufacturing survey from the Philadelphia Federal Reserve, a report that has been showing special weakness all year. The ISM manufacturing report on the national level has been holding steady but just barely with new order readings sagging. The manufacturing sector, benefiting from foreign markets for capital goods, is still hanging in there despite this year's slowdown in domestic demand. Industrial production data later this morning will offer a definitive view of the manufacturing sector during July.
The Empire State manufacturing index has been mixed on the production side in recent months but there is no doubt about the direction of prices - sharply up. The Empire State's general business conditions index posted a minus 4.9 reading in July indicating month-to-month contraction but was improved from the prior month's minus 8.7. Readings for new orders and shipments were both solidly positive, coming in at 8.3 and 13.5. All three readings compare with negative levels in June. Price readings have been extremely elevated at a record 77.9 for prices paid, up from 66.3 in June, and at a record 32.6 for prices received, up from 26.7.
Empire State Manufacturing Survey Consensus Forecast for August 08: -2.8
Range: -10.0 to -1.0
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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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