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

October 2007 Report

General Business Conditions


The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved substantially in October. The general business conditions index rose markedly, to 28.8. The new orders and shipments indexes rebounded from a September drop. The prices paid index held steady at a moderately high level, and the prices received index climbed for a second consecutive month. The number of employees index also continued to climb, and the average workweek index shot up to its highest level in a year. Future indexes conveyed optimism; the indexes for employment six months ahead were especially favorable. The capital spending and technology spending indexes were positive and higher than last month’s levels.

In a series of supplementary questions (click on Supplemental Report tab), manufacturers were asked about their capital spending plans over the next six to twelve months. Nearly 42 percent of respondents reported that they would increase capital spending, while 19 percent indicated that they would reduce it. However, when asked about recent revisions to capital spending plans, slightly more respondents reported downward revisions (23 percent) than upward revisions (16 percent). Looking ahead to 2008 capital spending, manufacturers anticipated some reduction in spending on structures, on balance, but planned to increase spending on computer hardware and other equipment.

Business Conditions Rebound
The general business conditions index reversed its September decline, rising 14 points to 28.8. Except for last month, the index has remained near this level since June. The new orders index posted a similar gain, rising to 25.0. The shipments index declined sharply last month, but shot up 24 points to 28.6 in October. The unfilled orders, delivery time, and inventories indexes all hovered just above zero.

The prices paid index held steady at 36.1. The prices received index rose marginally, to 15.1. Employment indexes were positive and higher than last month. The index for number of employees advanced to 20.5, surpassing all earlier readings for the year. The average workweek index increased substantially, rising to 23.3, its highest level in a year.

Outlook Remains Optimistic
Future indexes suggested that manufacturers expect conditions to continue improving over the next six months. The future general business conditions index held steady at 50.6. The future new orders and shipments indexes were positive and near September levels. The future prices paid index climbed for a second consecutive month, to 50.0, while the future prices received index fell to 21.8. Future employment indexes were noticeably higher, with the future workweek index, at 23.6, reaching a near-record level. The capital spending and technology spending indexes rose slightly.