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The September 2014 Empire State Manufacturing Survey indicates that business activity expanded at a robust pace for New York manufacturers. The headline general business conditions index rose thirteen points to 27.5, a multiyear high. The new orders index moved up three points to 16.9, and the shipments index advanced two points to 27.1. The unfilled orders index fell three points to -10.9. The prices paid index declined three points to 23.9, indicating a slower pace of input price increases, while the prices received index climbed nine points to 17.4, suggesting a pickup in the pace of selling price increases. Employment indexes showed a slight increase in employment levels and hours worked. Indexes for the six-month outlook conveyed a high degree of optimism about future business conditions.
Growth in business activity for New York manufacturers was solid, according to the September 2014 survey. The general business conditions index climbed thirteen points to 27.5, its highest level since late 2009. Forty-six percent of respondents reported that conditions had improved over the month, while 18 percent reported that conditions had worsened. The new orders index rose three points to 16.9, indicating a sturdy increase in orders, and the shipments index advanced two points to 27.1, pointing to a substantial increase in shipments. The unfilled orders index dropped three points to -10.9, suggesting that fewer orders remained unfilled over the month. The delivery time index was little changed at -5.4, and the inventories index, up seven points to -7.6, showed a decline in inventory levels for a third consecutive month.
Selling Prices Rise More Sharply
The prices paid index was slightly lower this month, falling three points to 23.9—a sign that input price increases were somewhat less widespread. The prices received index, however, jumped nine points to 17.4, indicating a pickup in the pace of selling price increases. Employment indexes pointed to a small increase in employment levels and hours worked: the index for number of employees fell ten points to 3.3, and the average workweek index dropped five points to 3.3.
Outlook Remains Bright
Optimism about future business conditions remained high. The index for future general business conditions was unchanged from last month at 46.7. The future new orders index fell five points to 45.6, and the future shipments index declined seven points to 47.5. Though both of these indexes were somewhat below their August levels, they remained high by historical standards. The index for expected number of employees dipped to 14.1, and the future average workweek index was 5.4. The capital expenditures index fell five points to 13.0, and the technology spending index edged down three points to 9.8.
Participants from across the state in
a variety of industries respond to a questionnaire and
report the change in a variety of indicators from the
previous month. Respondents also state the likely direction
of these same indicators six months ahead. April 2002
is the first report, although survey data date back
to July 2001.
The survey is sent on the first day of each month to
the same pool of about 200 manufacturing executives
in New York State, typically the president or CEO. About
100 responses are received. Most are completed by the
tenth, although surveys are accepted until the fifteenth.
Respondents come from a wide range of industries from
across the New York State. No one industry dominates
the respondent pool.
The survey's main index, general business conditions, is not a weighted average of other indicators—it is a distinct question posed on the survey.
Each index is seasonally adjusted when stable seasonality is detected.
Each January, all data undergo a benchmark revision
to reflect new seasonal factors.
The Empire State Manufacturing Survey seasonally adjusts data based on the Census X-12 additive procedure utilizing a logistic transformation.
The "increase" and "decrease" percentage
components of the diffusion indexes are each tested
for seasonality separately and adjusted accordingly
if such patterns exist. If no seasonality is detected,
the component is left unadjusted. The "no change"
component contains the residual, computed by subtracting
the (adjusted) increase and decrease from 100. Seasonal
factors are forecast in December for the upcoming year.
Data are adjusted using a logistic transformation.
The not-seasonally adjusted series, expressed in decimal
form (referred to as "p"), is transformed
using the following equation:
X = log(p/(1-p))
The seasonal factor is then subtracted from X:
adjX = X - seasonal factor
The result is then transformed using the following
SA Series = exponential(adjX)/(1+exponential(adjX))