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

September 2007 Report

General Business Conditions

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers continued to improve in September, but at a slower pace than in the past few months. The general business conditions index fell to 14.7.

The new orders index dropped, while the shipments index declined sharply. The prices paid index, although elevated, held steady, as the prices received index rose several points. The number of employees index inched upward. Future indexes conveyed continued optimism, with the future shipments index increasing notably. The capital expenditures index fell for a second consecutive month.

In a series of supplementary questions (see Supplemental Report tab), manufacturers were asked to quantify past and expected changes in their overall selling prices. The same questions had been asked a year ago. In the current survey, selling prices rose 2.0 percent, on average, over the past twelve months, and were expected to rise by 1.7 percent over the year ahead; both figures are somewhat lower than in last September’s survey.

When asked an additional question about the probability of specified price changes over the next twelve months, respondents indicated, on average, a 40 percent chance that prices would remain within 2 percent of their current levels, and a 43 percent likelihood that they would rise by between 2 and 8 percent.

Business Conditions Improve at a Slower Pace
The general business conditions index fell 10 points, to 14.7, with 32 percent of respondents reporting that conditions improved in September, compared with 40 percent who indicated the same in August, and 18 percent reporting that conditions had worsened. The new orders index, while positive, posted a second consecutive monthly decline, falling to 13.6. The shipments index fell sharply, to 5.1—its lowest level in more than two years. The unfilled orders index dipped slightly below zero, and the delivery time and inventories indexes were both just above zero.

The prices paid index, at 35.1, remained close to last month’s level, as the prices received index rose several points, to 11.7. Employment indexes were positive, but moved in opposite directions: the index for the number of employees rose to 18.2, while the average workweek index fell several points, to 9.6.

Outlook Remains Favorable
Future indexes conveyed an expectation that conditions would continue to improve over the next six months. The future general business conditions index held steady at 48.8. The future new orders index rose slightly and, contrary to the current shipments index, the future shipments index rose sharply, to 52.1. The future prices paid index climbed 8 points, to 46.8, while the future prices received index receded to 23.8. The future number of employees index rose to 30.1. The capital expenditures index fell for a second consecutive month, to 22.3, as the technology spending index held steady at 14.9.

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