Empire State Manufacturing Surges

Consensus was for no gain.

The May figure was -1.43.

The rest of the print was super ugly, especially the labor index, which was flat.

The June 2013 Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved modestly. The general business conditions index—the most comprehensive of the survey's measures—rose nine points to 7.8. Nevertheless, most other indicators in the survey fell. The new orders index slipped six points to -6.7, the shipments index fell twelve points to -11.8, and the unfilled orders index fell eight points to -14.5. The prices paid index held steady at 21.0, while the prices received index rose seven points to 11.3. Labor market conditions worsened, with the index for number of employees dropping to zero and the average workweek index retreating ten points to -11.3. Continuing the trend seen in the past few months, indexes for the six-month outlook declined, suggesting that optimism about future conditions was weakening further.

In a series of supplementary survey questions, manufacturers were asked to look back and assess the short-term and medium-term effects of Superstorm Sandy on their business. As in last November’s survey (conducted immediately after the storm), the vast majority of upstate firms said that they were essentially unaffected by the storm. However, firms in New York City, Long Island, and the Lower Hudson Valley reported that it took an average of more than two weeks after the storm for business to get back to normal, and more than a third of these firms said that the storm had adversely affected their overall business revenue during the seven months since Sandy.

After dipping into negative territory last month, the general business conditions index for June recovered some ground, rising nine points to 7.8—a sign that conditions had improved modestly. Roughly 29 percent reported that conditions had gotten better over the month, while 22 percent reported that conditions had worsened. However, while the general business conditions index was positive and higher than last month, many of the survey’s other indicators were negative and noticeably weaker. The new orders index fell six points to -6.7, and the shipments index fell twelve points to -11.8. The unfilled orders index dropped eight points to -14.5, and the delivery time index declined three points to -6.5. The inventories index fell three points to -11.3, extending the decline in inventories to a fourth consecutive month.

Labor Market Conditions Soften

The prices paid index was little changed at 21.0, pointing to a steady level of input price increases over the month. The prices received index climbed seven points to 11.3, indicating that selling price increases had picked up. Labor market conditions were weak: the index for number of employees fell six points to zero, indicating that employment levels were flat, and the average workweek index declined ten points to -11.3, a sign that hours worked fell modestly.

Six-Month Outlook Continues to Weaken

Hewing to the pattern of the past few months, indexes for the six-month outlook declined, suggesting that optimism about future conditions continued to wane. The future general business conditions index inched down to 25.0, the future new orders index fell nine points to 19.8, and the future shipments index fell five points to 20.2. The future prices paid index shot up sixteen points to 45.2, indicating that input price increases were expected to accelerate, while the future prices received index rose three points to 17.7. The index for expected number of employees retreated to 1.6, and the future average workweek index declined eleven points to -9.7. The capital expenditures index fell steeply, dropping twenty points to 3.2, and the technology spending index moved into negative territory for the first time since 2009, declining fifteen points to -3.2.

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