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July 2017 Empire State Manufacturing Index Declined

By Kurt Osterberg · On July 17, 2017

The Empire State Manufacturing Survey declined but remains in positive territory. Important internals likewise declined.

Analyst Opinion of Empire State Manufacturing Survey

I am not a fan of surveys – and this survey jumps around erratically.

Expectations from Bloomberg / Econoday were for a reading between 10.0 to 18.3 (consensus +15.0) versus the 9.8 reported. Any value above zero shows expansion for the New York area manufacturers.

New orders sub-index of the Empire State Manufacturing declined and the unfilled orders sub-index declined.

This noisy index has moved from +0.6 (July 2016), -4.2 (August), -2.0 (September), -6.8 (October), +1.5 (November), +9.0 (December), +6.5 (January 2017), 18.2 February, +16.4 (March), +5.2 (April), -1.0 (May), 19.8 (July) – and now 9.8.

As this index is very noisy, it is hard to understand what these massive moves up or down mean – however this regional manufacturing survey is normally one of the more pessimistic.

Econintersect reminds you that this is a survey (a quantification of opinion). Please see caveats at the end of this post. However, sometimes it is better not to look too deeply into the details of a noisy survey as just the overview is all you need to know.

From the report:

Business activity grew modestly in New York State, according to firms responding to the July 2017 Empire State Manufacturing Survey. The headline general business conditions index fell ten points to 9.8. The new orders index moved down to 13.3, and the shipments index fell to 10.5, suggesting that orders and shipments continued to grow, though at a somewhat slower pace than in June. Delivery times continued to lengthen, and inventory levels were fairly steady. Labor market indicators pointed to a small increase in employment and no change in hours worked. Input prices and selling prices rose at about the same pace as last month. Indexes assessing the six-month outlook suggested that firms remained positive about future conditions, though they were less optimistic than in June.