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 9/15/08 For Sep 2008 | ||||||||||||
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Highlights
Activity is stable and cost pressures are easing, the results of a solid Empire State report that belies a -7.4 headline reading. Though the headline index came down, new orders, the most important reading of all, showed month-to-month improvement to 4.4 vs. August's -2.2. Contraction in unfilled orders eased, -3.4 vs. -9.0, and there was even a little month-to-month strength in shipments, at 0.6 vs. month-to-month contraction of -0.9 in the August report. Manufacturers in the region successfully pared inventory in the month, at an index of -2.3 in September, while they also continued to cutback on their workforces with the number of employees index at -4.6 vs. July's -4.5.
Some of the best news in the report is on prices with input pressures easing substantially to 44.8 vs. 65.2 in August and 77.9 in July and with output prices also easing, at 24.1 vs. August's 32.6. But the best news in the report may be the six-month outlook where respondents see substantial strength in general business conditions, 43.1 vs August's 34.6; new orders, 46.3 vs. 47.3; and shipments, 49.5 vs. 45.4. The outlook readings are a reminder that the manufacturing sector isn't hostage, at least yet, to the sweeping turbulence underway in the financial system. Financial markets, focused on counterparty risk and the unfolding of the weekend's events, showed no reaction to the report.
The Empire State manufacturing index edged back up into positive territory in August to 2.8 from minus 4.9 in July. Key readings were mostly near the neutral level of zero, indicating no growth but generally reflecting softer conditions than in July. Orders point to a sluggish overall number for September as new orders slipped to minus 2.2 from plus 8.3 in July. Also, unfilled orders slipped further - to minus 9.0 from minus 8.4 the month before.
Empire State Manufacturing Survey Consensus Forecast for September 08: 0.50
Range: -2.00 to 6.00
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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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