The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
Regional & Community Outreach connects the Bank to Main Street via structured dialogues and two-way conversations on small business, mortgages, and household credit.
Economic Education improves public knowledge about the Federal Reserve System, monetary policy implementation, and promoting financial stability through the Museum and programs for K-16 students and educators, and the community.
The July 2014 Empire State Manufacturing Survey indicates that business conditions improved significantly for a third consecutive month for New York manufacturers. The headline general business conditions index climbed six points to 25.6, its highest level in more than four years. The new orders index was little changed at 18.8, while the shipments index rose nine points to 23.6; both indexes were at multiyear highs. The unfilled orders index fell six points to -6.8. The indexes for both prices paid and prices received were higher this month, indicating a pickup in the pace of price increases. Labor market conditions continued to improve, with indexes pointing to a solid increase in employment levels and a slight increase in hours worked. Although many of the indexes for the six-month outlook were significantly lower, conditions overall were expected to continue improving in the months ahead.
General Business Conditions Index Reaches Four-Year High
Business conditions improved significantly for a third consecutive month for New York manufacturers, according to the July 2014 survey. The general business conditions index advanced six points to 25.6, a four-year high. Forty-one percent of respondents reported that conditions had improved over the month, while 15 percent reported that conditions had worsened. The new orders index held at 18.8, and the shipments index rose nine points to 23.6; both of these indexes were at their highest levels since early 2010. The unfilled orders index dropped six points to -6.8, suggesting that fewer orders remained unfilled. The delivery time index fell two points to -1.1, and the inventories index fell 13 points to -3.4, pointing to a small decline in inventory levels.
A Solid Increase in Employment
Both price indexes climbed this month, and suggested that the pace of price increases had accelerated. The prices paid index rose eight points to 25.0, and the prices received index inched up three points to 6.8. Labor market conditions continued to improve. The index for number of employees climbed six points to 17.0, a level which indicated a solid increase in employment levels. The average workweek index retreated seven points to 2.3, and pointed to a slight increase in hours worked.
Level of Optimism Falls
Despite the steep gains in many of the survey’s indexes for current conditions, optimism about future conditions, while still fairly strong, diminished. The index for future general business conditions fell eleven points to 28.5. The future new orders index dropped nineteen points to 25.6, and the future shipments index tumbled twenty-one points to 24.6. The index for expected number of employees fell three points to 17.1, and the future average workweek index turned slightly negative. The capital expenditures index fell three points to 9.1, and the technology spending index rose seven points to 10.2.
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))