The Empire State Manufacturing Survey, released October 15 by the Federal Reserve Bank of New York, ndicates that conditions improved in October for New York State manufacturers. The general business conditions index rose 12 points, to 15.7. The new orders and shipments indexes were also positive and well above their September levels. The inventories index dipped below zero, falling to its lowest level since January. The indexes for prices paid and prices received rose. The index for number of employees climbed for a third consecutive month, although the average workweek index dipped slightly. Future indexes turned up noticeably in October, with the future general business conditions index rising 9 points and the future number of employees index advancing 10 points.
In a series of supplementary questions, firms were asked about borrowing needs, perceived changes in credit availability and related issues. On balance, respondents reported little change in borrowing needs — over the past 12 months or over the past three months. Similarly, a majority of respondents reported no change in credit availability over the same two intervals; 14 percent indicated that credit had tightened in the past three months, while just 5 percent noted some easing in credit. These results are not substantially different from those of the March 2010 survey, which had asked the same questions.
Business Activity Picks Up
The general business conditions index climbed 12 points to 15.7, a clear gain over the relatively low but positive readings seen from July through September. This month, 35 percent of respondents — roughly the same share as in September — reported that conditions had improved over the month, while 20 percent reported that conditions had worsened, a significantly lower percentage than last month. The new orders index moved up 9 points, to 12.9. After turning negative in August and September, the shipments index rose above zero, climbing 20 points to 19.4. The unfilled orders index rose for a third consecutive month, but remained just below zero at -1.7. The delivery time index advanced several points, but also remained negative, suggesting that delivery times continued to shorten. The inventories index turned negative, falling 13 points to -11.7, its lowest level since January, indicating that inventory levels declined over the past month.
Price Increases Accelerate, Employment Levels Rise
The indexes for prices paid and prices received climbed in October. The prices paid index rose 8 points to 30.0, suggesting that the pace of input price increases had quickened. The prices received index rose 7 points, reaching 8.3. The index for number of employees moved up 7 points, to 21.7, a level roughly matching the peaks reached in April and May of this year. Thirty-three percent of respondents increased employment levels this month, while only 12 percent reduced their workforces. The average workweek index inched down 4 points, but remained positive at 3.3, indicating a slightly lengthening workweek.
Six-Month Outlook Improves
Future indexes were noticeably higher in October, although they generally remained below the more optimistic values reported earlier this year. The future general business conditions index rose 9 points, reaching 40.0, with a little more than half of respondents expecting conditions to improve in the months ahead. The future new orders and shipments indexes also climbed. The future delivery time index rose above zero—a sign that, on balance, respondents expect delivery times to lengthen. The future inventories index rose to 10.0, suggesting that some increase in inventory levels is expected. The future indexes for prices paid and prices received were positive and higher than last month, and the index for expected number of employees was positive and moved up 10 points. The capital expenditures index held steady at 25.0, and the technology spending index was little changed at 13.3.