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 11/17/08 For Nov 2008 | ||||||||||||
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Highlights
The rate of contraction is steady and severe in the New York manufacturing region, a sample of what the manufacturing sector is suffering on a national level. The Empire State's general business conditions index was little changed in November at -25.4. Contraction in new orders remains severe at -22.2 with contraction in shipments deepening slightly to -13.9. Manufacturers are working down their backlogs, at -24.1 for a nearly 12 point plunge in the month, and are also working down their inventories which fell nearly 10 points to -26.5.
This is a very difficult time for factory workers. The number of employees index plunged more than 25 points to -28.9 while the workweek fell more than 15 points to -25.3. Disinflation is evident in the price readings with prices paid down more than 10 points to 20.48 and prices received down nearly 15 points to 6.0.
The gravity of conditions is reflected in the six-month outlook which fell more than 10 points to 13.02, down more than 30 points since the beginning on the market crash in September. Industrial production data, to be posted later this morning at 9:15 a.m. ET, will offer national data on the industrial and manufacturing sectors for the month of October. Money moved into the safety of the Treasuries following the Empire State report.
The Empire State manufacturing index contracted sharply in October, plunging more than 17 points to minus 24.6. While the strike at Boeing played a role in the decline, overall economic weakness was the general theme. Looking ahead, the new orders index is an ill omen as it came in at minus 20.5 and unfilled orders were minus 12.2. At least cost pressures eased significantly. The prices paid index fell to 31.7 in October from 44.8 the previous month while the prices received index declined to 20.7 from 24.1.
Empire State Manufacturing Survey Consensus Forecast for November 08: -26.0
Range: -40.0 to -14.0
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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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