Conditions held relatively steady in New York’s manufacturing sector in September

RP news wires

The Empire State Manufacturing Survey indicates that conditions held relatively steady in New York's manufacturing sector in September, the Federal Reserve Bank of New York reported on September 15. The general business conditions index remained positive, although it slipped 3 points to 4.1. The new orders and shipments indexes were both up moderately for the month, at levels signaling stable activity. The prices paid index was positive and little changed from last month, while the prices received index edged up to just above zero. Employment indexes were positive, suggesting that employment levels and the average workweek continued to expand over the month. The degree of optimism about the six-month outlook continued to deteriorate, with the future general business conditions index hitting its lowest level since early 2009.

In response to a series of supplementary questions about past and prospective changes in the selling price of their goods, manufacturers indicated that prices were virtually unchanged, on average, over the past twelve months; in an identical survey conducted last September, the average respondent had reported a decline of 2.1 percent. Looking ahead to the next twelve months, respondents indicated that they expect prices to rise by 1.8 percent, on average — an increase very close to that reported in last year's survey. When asked a separate question about the probability of specified price changes over the next twelve months, respondents, on average, indicated a 46 percent chance that their selling prices would remain within 2 percent of their current levels, and a 36 percent chance that prices would rise by between 2 and 8 percent.

Business Activity Flattens Out
The general business conditions index remained above zero in September, but inched down three points from August. At 4.1, the index suggests that business activity was little changed over the month. Almost 35 percent of respondents said that conditions had improved over the month — up from the 30 percent who had said so last month, but the percentage that reported worsening conditions increased from 22 percent in August to 31 percent. After falling below zero last month, the new orders index turned positive, rising 7 points to 4.3. The shipments index also rebounded this month, rising 11 points to -0.3. The unfilled orders index climbed as well, rising 4 points to -6.0. The delivery time index fell to -11.9, suggesting that delivery times shortened. The inventories index inched down toward zero, indicating that inventory levels remained little changed over the month.

Resource Costs and Employment Levels Continue to Climb
The prices paid index held near its August level and, at 22.4, pointed to a continued increase in input prices. The prices received index hovered at a level near zero, suggesting that selling prices had held steady. Employment indexes were positive. The index for number of employees was 14.9, little changed from last month, indicating that employment levels continued to increase in September. The average workweek was virtually unchanged at 7.5.

Degree of Optimism about the Future Continues to Wane
Future indexes generally continued to trend downward in September, as they had throughout most of the year. The future general business conditions index fell 4 points to 31.3, indicating that, on balance, New York manufacturers still expect business conditions to improve over the next six months; however, the index is at its lowest level since March 2009. The future new orders index drifted down 6 points to 25.4, while the future shipments index edged up to 28.4. The future unfilled orders index fell below zero. The future inventories index held steady at 3.0. The future prices paid index rose to 35.8, while the future prices received index dropped to 14.9. Future employment indexes fell modestly, but remained above zero, indicating that employment levels are expected to continue to climb in the months ahead. The capital expenditures index rose slightly to 25.4, and the technology spending index climbed to 14.9.

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