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The January 2015 Empire State Manufacturing Survey indicates that business activity expanded for New York manufacturers. The headline general business conditions index climbed eleven points to 10.0. This month’s survey also showed modest growth in new orders and shipments. Labor market conditions were mixed, with the index for number of employees rising several points to 13.7, while the average workweek index remained negative at -8.4. Both the prices paid and prices received indexes came in at 12.6, indicating a continued modest increase in input prices and selling prices. As has been the case for much of the past year, indexes for the six-month outlook pointed to widespread optimism about future conditions.
After falling slightly below zero last month, the general business conditions index bounced back in January, climbing eleven points to 10.0. Thirty-three percent of respondents reported that conditions had improved, while 23 percent reported that conditions had worsened. The new orders index rose six points to 6.1, signaling a modest increase in orders, and the shipments index rose seven points to 9.6, indicating a similarly modest rise in shipments. The unfilled orders index moved up after a sharp decline last month, but remained negative at -8.4. The delivery time index was -5.3, pointing to shorter delivery times, and the inventories index was -7.4, suggesting a decline in inventory levels.
Modest Price Increases Continue
The prices paid index was little changed at 12.6; for a fourth consecutive month, it showed a modest increase in input prices. The prices received index rose for a second month—a sign that selling prices were increasing at a faster pace. Labor market indicators were mixed. The index for number of employees climbed five points to 13.7, suggesting that employment levels continued to increase. The average workweek index, however, remained below zero and, at -8.4, pointed to a decline in hours worked for a fourth consecutive month.
Optimism Remains Widespread
Indexes assessing the six-month outlook conveyed considerable optimism about future business activity. The index for future general business conditions rose nine points to 48.4, with nearly 60 percent of respondents expecting conditions to improve. The future new orders and shipments indexes both advanced to levels just above 40. The index for expected number of employees rose eleven points to 31.6, its highest level in nearly three years, indicating that a significant expansion in employment is anticipated in the months ahead. The capital expenditures index was little changed at 14.7, while the technology spending index fell five points to 12.6.
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))
To view the Seasonal Factors data, please click on the “Data & Charts” tab.