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The July 2015 Empire State Manufacturing Survey indicates that business conditions improved slightly for New York manufacturers. The headline general business conditions index climbed six points to 3.9. The new orders index was little changed at -3.5, a sign that orders continued to decline, and the shipments index fell four points to 7.9. Labor market indicators signaled a small increase in employment levels and the average workweek. Price indexes pointed to modest increases in both input prices and selling prices, with the prices paid index reaching its lowest level in three years. Indexes for the six-month outlook suggested that optimism about future business conditions was slightly higher than in June, but in line with the trend over the past six months, expectations for improvement remained subdued.
Business conditions were somewhat better for New York manufacturers, according to the July 2015 survey. After a slightly negative reading last month, the general business conditions index rose six points to 3.9. This index has moved in a see-saw pattern around zero for the past four months, indicating that business activity remains subdued. Thirty-one percent of respondents reported that conditions had improved, while 27 percent reported that conditions had worsened. The new orders index remained negative and, at -3.5, indicated a small decline in orders for a second consecutive month. The shipments index came in at 7.9, pointing to a modest increase in shipments. The unfilled orders index retreated three points to -7.5, signaling a decline in unfilled orders. The delivery time index came in at zero, indicating that delivery times were unchanged, and the inventories index fell 10 points to -8.5, a sign that inventory levels dropped.
Prices Increase Modestly
Price increases remained modest. The prices paid index fell to 7.5, its lowest level in three years, indicating only a modest increase in input prices. The prices received index rose four points to 5.3. Labor market conditions pointed to a small increase in employment and hours worked. The index for number of employees fell five points to 3.2, and the average workweek index was little changed at 4.3.
Optimism Somewhat Higher, but Remains Subdued
Many of the indexes for future activity inched higher, but in line with the trend over the past several months, remained subdued compared with the levels recorded throughout 2014. The index for future business activity edged up a point to 27.0. The index for future new orders increased six points to 32.2, and the index for future shipments rose three points to 25.4. Indexes for future prices paid and received were little changed. The index for future employment declined for a fourth consecutive month to 9.6, but it still suggested that manufacturers expected employment levels to rise. The capital expenditures index climbed ten points to 21.3, and the technology spending index moved up to 10.6.
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.