The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved for the sixth consecutive month in January. The general business conditions index climbed 11 points, to 15.9. The new orders and shipments indexes posted similar increases, and the unfilled orders index rose above zero. Both the prices paid index and the prices received index rose significantly, with the latter moving above zero for the first time in more than a year. Employment indexes advanced into positive territory. Future indexes were highly optimistic; activity and employment were widely expected to improve over the next six months. Prices, however, were expected to continue to climb in the months ahead.
In a series of supplementary questions, manufacturers were asked about their capital spending plans (see Supplemental Reports tab). Looking ahead to the next six to twelve months, 44 percent of respondents indicated that they expected to increase capital spending relative to its level in the past six to twelve months, while just 12 percent anticipated a decline. When the same question had been asked in October 2007, 42 percent of respondents had anticipated increased capital spending, while just under 19 percent had expected reductions. The most commonly cited factor behind increased investment was a need to replace IT (information technology) equipment, followed closely by a need to replace other capital goods. The most widely cited factors behind steady or decreased capital investment were low capacity utilization and low expected sales growth.
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