Empire State Maufacturing Survey
The monthly survey of manufacturers in New York State conducted by the Federal Reserve Bank of New York.

General Business Conditions

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to improve in August. The general business conditions index held steady at 25.1.

The new orders and shipments indexes remained at similarly high levels, while the unfilled orders index continued to hover near zero. The prices paid index also remained essentially unchanged, while the prices received index fell to its lowest level in two years. Employment indexes were positive and above their July readings. Future indexes conveyed steady optimism, although the future shipments index turned sharply lower. While positive, future price indexes fell, as did the capital spending and technology spending indexes.

In a series of supplementary questions (see Supplemental Report tab), manufacturers were asked to evaluate the degree to which certain business issues posed problems for their firms; the same questions were asked in the August 2006 survey. Of the issues listed, finding qualified workers and the cost of employee benefits were cited most frequently this year as a major problem, followed by workers’ compensation costs and the cost of resources (such as energy and other commodities). The most substantial change from last year’s survey was the sharp increase in the percentage of respondents who viewed the task of finding qualified workers as a major problem. Indeed, asked to identify the single most significant problem they faced, 47 percent of manufacturers—up from 19 percent in last August’s survey—chose finding qualified workers.

Business Conditions Improve Further
The general business conditions index, at 25.1, held steady for a third consecutive month, with 40 percent of respondents reporting that conditions had improved in August and 15 percent reporting that conditions had deteriorated. The new orders index fell slightly from last month, to 22.2, while the shipments index was nearly unchanged, at 28.8. The unfilled orders index edged down to 1.1. The delivery time index broke into positive territory, rising to 6.5. After a sharp decline last month, the inventories index made up much of the ground it had lost, reaching -2.2.

The prices paid index, at 34.4, remained close to last month’s level. The prices received index continued to fall, reaching 3.2, its lowest level in two years. Employment indexes were positive; the index for number of employees held steady at 11.6, while the average workweek index rose substantially, to 16.1.

Optimism Continues
Future indexes conveyed an expectation that conditions would continue to improve over the next six months. The future general business conditions index was 50.4, just above its July figure. The future new orders and shipments indexes, while positive, fell from their July levels. The future inventories index dropped to -12.9. Both future price indexes were positive, although lower by several points. The capital expenditures index fell 3 points to 26.9, and the technology spending index dropped to 14.0.

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