Empire State Manufacturing Survey
April 2008 Report

General Business Conditions

The Empire State Manufacturing Survey indicates that manufacturing activity in New York stabilized in April after deteriorating in February and March. The general business conditions index rose sharply, to 0.6. The new orders and shipments indexes also moved into positive territory, the latter climbing 23 points. The prices paid index advanced to its highest level since late 2005, and the prices received index rose modestly. Employment indexes hovered near zero. Future indexes were generally weaker than in March, and the capital expenditures index, while positive, fell to its lowest level since 2003.

A series of supplementary questions in the April survey elicited manufacturers’ observations on employment trends in their firms (see Supplemental Report tab). Asked about anticipated changes in the size of their workforces over the next twelve months, more manufacturers predicted increases (45 percent) than declines (29 percent); on average, respondents expected a slight increase. When asked about the causes of past and future employee separations, respondents indicated that quits and retirements were far more common than layoffs.

Business Activity Levels Off
After two consecutive months of negative readings, the general business conditions index rebounded in April, rising 23 points to 0.6. The percentage of respondents reporting worsening conditions declined markedly—from 41 percent in March to 26 percent in April—while the percentage reporting improved conditions rose from 19 percent to 27 percent. The new orders index climbed to 0.1, and the shipments index shot up 23 points to 17.5. The unfilled orders index fell 7 points, to -6.3. The delivery time index dropped slightly, to -3.1, and the inventories index, at -4.2, remained close to last month’s level.

Cost Pressures Accelerate
The prices paid index climbed for a fourth consecutive month, reaching 57.3, its highest level since November 2005; 59 percent of respondents reported higher prices. The prices received index notched up 5 points to 20.8. Both the index for number of employees and the average workweek were zero.

Outlook Weakens
The future general business conditions index fell to 19.6, similar to January’s near-record low. While the future new orders index rose to 33.3, the future shipments index declined to 26.4. The future prices paid index climbed to 61.5, and the future prices received index inched up to 34.4. After rising sharply last month, the future index for number of employees gave up its gain, falling to 4.1. The capital expenditures index dropped several points to 11.5, its lowest level since 2003, and the technology spending index, at 10.4, remained close to last month’s level.

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