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 10/15/08 For Oct 2008 | ||||||||||||
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Highlights
There's bad news from the New York region's manufacturing sector which is contracting sharply in October, according to the Empire State index which plunged more than 17 points to -24.6. The report didn't offer factors for the decline but general economic weakness is the central factor with the machinists strike at Boeing a special factor. Especially ominous is that order readings are especially weak with new orders at -20.5 and unfilled orders at -12.2. Shipments are negative as are employment readings. Manufacturers in the region are of course working down inventory, and hopefully fast enough to avoid overhang in the months ahead. Cost pressures are easing a bit as is pricing power with prices received slipping 3-1/2 points to a still firm 20.7.
The news is just as bad for the six month outlook which fell to 24.2 in October from 43.1. Outlooks for new orders, shipments, and inventories all show significantly less strength than September. Manufacturers see little change ahead for prices. Today's results point to trouble for Thursday's report on the Mid-Atlantic manufacturing region and also to further, and perhaps deeper, contraction for the national report from the ISM. Concern over a manufacturing recession may deepen at month end with the durable goods report for September.
The Empire State manufacturing index dropped back into negative territory in September, falling to minus 7.4 from plus 2.8 in August. But detail indexes were not so negative. Notably, new orders showed month-to-month improvement, rising to plus 4.4 from minus 2.2 in Also, the contraction in unfilled orders eased, rising to minus 3.4 from minus 9.0. But the best news in the report was 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. 32.6 in August.
Empire State Manufacturing Survey Consensus Forecast for October 08: -10.50
Range: -23.70 to 0.00
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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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