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The February 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 edged down two points to 7.8. The new orders index fell five points to 1.2—evidence that orders were flat—while the shipments index climbed to 14.1. Employment indexes pointed to an increase in employment levels and little change in the average workweek. The prices paid index inched up two points to 14.6, indicating continued moderate input price increases, while the prices received index fell nine points to 3.4, suggesting a slowdown in selling price increases. Indexes for the six-month outlook, while generally positive, conveyed markedly less optimism than in recent months, with the index for future general business conditions falling twenty-three points. The capital spending index shot up eighteen points to 32.6, its highest level in more than three years.
The general business conditions index edged down two points to 7.8 in February, suggesting that conditions for New York manufacturers improved modestly for a second consecutive month. Twenty-nine percent of respondents reported that conditions had improved, while 21 percent reported that conditions had worsened. The new orders index fell five points to 1.2, indicating that orders were essentially flat. The shipments index climbed five points to 14.1, signaling that shipments increased at a faster pace this month. The unfilled orders index remained negative at -6.7. The delivery time index rose out of negative territory for the first time in several months: At 1.1, the index suggested that delivery times had not shortened as in previous months, but rather were little changed. The inventories index, at -2.3, showed that inventory levels were slightly lower.
Price Increases Remain Subdued
The prices paid index inched up two points to 14.6, signaling a moderate increase in input prices for a fifth consecutive month. The prices received index fell nine points to 3.4, indicating that the pace of selling price increases slowed. Labor market indicators pointed to an increase in employment levels, but little change in hours worked: the index for number of employees dipped four points to 10.1, while the average workweek index came in at -1.1.
Firms Less Optimistic
Indexes assessing the six-month outlook, though generally positive, conveyed considerably less optimism about future business activity than in recent months. The index for future general business conditions plunged twenty-three points to 25.6, its lowest level in more than two years. The future new orders and shipments indexes also posted significant declines. The future prices paid index fell several points to 27.0, and the future prices received index declined ten points to 5.6, its lowest level in more than five years. The index for expected number of employees, though lower, remained positive at 24.7. The capital expenditures index surged eighteen points to 32.6, its highest level in more than three years, and the technology spending index rose to 19.1.
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.