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The April 2015 Empire State Manufacturing Survey indicates that business activity was flat for New York manufacturers. The headline general business conditions index turned slightly negative for the first time since December, falling eight points to -1.2. The new orders index, negative for a second consecutive month, dropped four points to -6.0—evidence that orders were declining. The shipments index climbed to 15.2, indicating that shipments expanded at a solid pace. Labor market indicators pointed to an increase in employment levels but a somewhat shorter workweek. Input price increases picked up, with the prices paid index rising seven points to 19.2, while the prices received index fell four points to 4.3. The future general business conditions index climbed for a second consecutive month, suggesting greater optimism among manufacturers than in February and March, and the capital spending and technology spending indexes also advanced.
The general business conditions index fell below zero for the first time since December, declining eight points to -1.2 in a sign that activity was flat for New York manufacturers. Twenty-five percent of respondents reported that conditions had improved, while 26 percent reported that conditions had worsened. The new orders index fell for a third consecutive month, its four-point decline to -6.0 pointing to a drop-off in orders. The shipments index, however, climbed seven points to 15.2, indicating that shipments grew at a solid clip. The unfilled orders index was little changed at -11.7, and the delivery time index edged down to -4.3. The inventories index climbed out of negative territory for the first time since November; rising to 2.1, it signaled that inventory levels were slightly higher.
Labor Market Conditions Mixed
Labor market conditions were mixed. Although the index for number of employees fell, it remained well above zero at 9.6, indicating that employment continued to grow. However, the average workweek index fell nine points to -4.3, pointing to a slight decline in the average workweek. Input price increases picked up this month, with the prices paid index rising seven points to 19.2. The prices received index, by contrast, fell four points to 4.3, indicating only a small increase in selling prices.
Conditions Expected to Improve
Many of the indexes assessing the six-month outlook conveyed more optimism about future business activity than they had in February and March. The index for future general business conditions climbed for a second consecutive month, rising six points to 37.1 The future new orders and shipments indexes posted similar increases. The future prices paid index advanced to 38.3, suggesting that manufacturers expected a pickup in input price increases, while the future prices received index was little changed at 13.8. The index for future employment was lower, but still suggested that employment levels were expected to rise significantly in the months ahead. The capital expenditures index moved up six points to 24.5, and the technology spending index rose to 16.0.
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.