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The August 2015 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index tumbled nineteen points to -14.9, its lowest level since 2009. The new orders and shipments indexes also fell sharply, to -15.7 and -13.8 respectively, pointing to a marked decline in both orders and shipments. The inventories index dropped to -17.3, signaling that inventory levels were lower. Price indexes showed that input prices were slightly higher, while selling prices were flat. Labor market indicators suggested that employment levels and hours worked were little changed. Indexes for the six-month outlook registered somewhat greater optimism than in July, with the future general business conditions index rising seven points to 33.6.
Headline Index Falls to Its Lowest Level since the Great Recession
Business activity declined for New York manufacturers, according to the August 2015 survey. After hovering around zero since April, the general business conditions index dropped nineteen points to -14.9, its lowest level since April 2009. Nineteen percent of respondents reported that conditions had improved over the month, while 34 percent reported that conditions had worsened. The new orders index fell twelve points to -15.7, its lowest level in several years, indicating that orders were down appreciably, and the shipments index plunged twenty-two points to -13.8, pointing to a substantial decline in shipments. The unfilled orders index edged up three points to -4.5. The delivery time index fell to -4.6, indicating slightly shorter delivery times, and the inventories index fell nine points to -17.3, suggesting that inventory levels were significantly lower than last month.
Price increases remained subdued. The prices paid index was little changed at 7.3, continuing the pattern of modest input price increases seen in recent months. The prices received index fell to 0.9, indicating that selling prices were flat. Labor market indicators pointed to little change in employment and hours worked. The index for number of employees edged down one point to 1.8, and the average workweek index fell to -1.8.
Despite Current Weakness, Outlook Remains Fairly Positive
While indexes for future activity fell short of the higher levels recorded throughout 2014, they still showed a fair degree of optimism about the six-month outlook. The index for future business activity climbed seven points to 33.6. The index for future new orders dipped to 29.4, while the index for future shipments rose eight points to 33.0. Indexes for future prices paid and received advanced. The index for future number of employees declined for a fifth consecutive month, reaching 3.6—a sign that little change in employment levels was expected in the months ahead. The capital expenditures index fell four points to 17.3, and the technology spending index rose three points to 13.6.
Participants from across the state in
a variety of industries respond to a questionnaire and
report the change in a variety of indicators from the
previous month. Respondents also state the likely direction
of these same indicators six months ahead. April 2002
is the first report, although survey data date back
to July 2001.
The survey is sent on the first day of each month to
the same pool of about 200 manufacturing executives
in New York State, typically the president or CEO. About
100 responses are received. Most are completed by the
tenth, although surveys are accepted until the fifteenth.
Respondents come from a wide range of industries from
across the New York State. No one industry dominates
the respondent pool.
The survey's main index, general business conditions, is not a weighted average of other indicators—it is a distinct question posed on the survey.
Each index is seasonally adjusted when stable seasonality is detected.
Each January, all data undergo a benchmark revision
to reflect new seasonal factors.
The Empire State Manufacturing Survey seasonally adjusts data based on the Census X-12 additive procedure utilizing a logistic transformation.
The "increase" and "decrease" percentage
components of the diffusion indexes are each tested
for seasonality separately and adjusted accordingly
if such patterns exist. If no seasonality is detected,
the component is left unadjusted. The "no change"
component contains the residual, computed by subtracting
the (adjusted) increase and decrease from 100. Seasonal
factors are forecast in December for the upcoming year.
Data are adjusted using a logistic transformation.
The not-seasonally adjusted series, expressed in decimal
form (referred to as "p"), is transformed
using the following equation:
X = log(p/(1-p))
The seasonal factor is then subtracted from X:
adjX = X - seasonal factor
The result is then transformed using the following
SA Series = exponential(adjX)/(1+exponential(adjX))
To view the Seasonal Factors data, please click on the “Data & Charts” tab.