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The November 2014 Empire State Manufacturing Survey indicates that business activity continued to expand for New York manufacturers. The headline general business conditions index climbed four points to 10.2, indicating a pace of growth somewhat faster than last month’s. The new orders index rose eleven points to 9.1, and the shipments index advanced eleven points to 11.8. The index for number of employees edged down to 8.5 but remained positive, indicating that employment levels grew; the average workweek index, by contrast, was negative, pointing to a decline in hours worked. After falling sharply last month, the prices paid index was little changed at 10.6—a sign that input prices had increased only modestly. The prices received index fell to zero, indicating that selling prices were flat. Indexes for the six-month outlook were generally higher this month and conveyed a strong degree of optimism about future business conditions.
Rising four points to 10.2, the general business conditions index signaled that business activity continued to expand for New York manufacturers in November, and at a somewhat faster pace than last month. Nonetheless, the October and November readings for this index point to a downshift in the pace of growth compared with the May-September period, when the index averaged around 20. About 35 percent of respondents reported that conditions had improved over the month, while 24 percent reported that conditions had worsened. The new orders index bounced back into positive territory after dipping below zero last month; its eleven-point rise, to 9.1, pointed to a modest increase in orders. The shipments index also recovered from a sharp decline last month, climbing eleven points to 11.8. The unfilled orders index remained negative, falling three points to -7.5. The delivery time index, down four points to -9.6, indicated that delivery times were shorter, and the inventories index, at zero, suggested that inventory levels were unchanged.
Selling Prices Flat This Month
The prices paid index inched down to 10.6, its lowest level in more than two years, pointing to a fairly slow pace of growth in input prices. The prices received index recorded its lowest reading in a year, falling seven points to zero in a sign that selling prices were flat. The index for number of employees edged down to 8.5, indicating a modest increase in employment levels. At -7.5, the average workweek index reflected a decline in hours worked for a second consecutive month.
Optimism about Future Conditions Remains Strong
Indexes assessing the six-month outlook generally rose this month, and conveyed considerable optimism about future business activity. The index for future general business conditions climbed six points to 47.6, its highest level since January 2012. The future new orders index rose five points to 47.0, and the future shipments index rose two points to 44.7. The index for expected number of employees jumped twelve points to 24.5, and the future average workweek index advanced to 8.5. The capital expenditures index moved up six points to 27.7, its highest level in more than two years, and the technology spending index rose to 19.2.
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))