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The March 2015 Empire State Manufacturing Survey indicates that business activity continued to expand at a modest pace for New York manufacturers. The headline general business conditions index, at 6.9, remained close to last month’s level. The new orders index fell four points to -2.4, pointing to a small decline in orders, and the shipments index declined six points to 7.9. Labor market indicators pointed to a solid increase in employment levels and a lengthening in the average workweek. Pricing pressures remained subdued, with the prices paid index inching down two points to 12.4, and the prices received index at 8.3. As in February, indexes for the six-month outlook conveyed less optimism than in many of the preceding months, and the capital spending and technology spending indexes declined.
The general business conditions index was little changed at 6.9 in March, suggesting that conditions for New York manufacturers continued to improve modestly and at roughly the same pace as in the past several months. Twenty-six percent of respondents reported that conditions had improved, while 19 percent reported that conditions had worsened. The new orders index declined for a second consecutive month, falling four points to -2.4—evidence of a slight decline in orders. The shipments index fell six points to 7.9, and the unfilled orders index fell seven points to -13.4. The delivery time index dropped to -2.0, indicating slightly shorter delivery times, and the inventories index fell to -5.1, signaling that inventory levels were lower.
Solid Gains in Employment
Pricing pressures remained subdued. The prices paid index edged down two points to 12.4, signaling a moderate increase in input prices for a sixth consecutive month. The prices received index climbed five points to 8.3, indicating a modest increase in selling prices. The index for number of employees climbed eight points to 18.6, pointing to significant gains in employment, and the average workweek rose six points to 5.2, indicating a small increase in the average workweek.
Firms Remain Less Optimistic Than in Previous Months
As in February, indexes assessing the six-month outlook, though generally positive, conveyed more restrained optimism about future business activity than they had throughout much of the past year. After plunging last month, the index for future general business conditions rose five points to 30.7, remaining well below readings that were generally above 40 from May 2014 through January 2015. The future new orders and shipments indexes declined. The future prices paid and future prices received indexes edged higher, but remained subdued. A significant expansion in employment levels was anticipated, with the index for expect number of employees rising to 28.9. After reaching a multiyear high last month, the capital expenditures index fell back to 18.6, and the technology spending index dropped to 7.2.
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.