Empire State Manufacturing Survey Shows Grim Results For June
The Empire State Manufacturing Survey results came out today, indicating that New York manufacturers business conditions have regressed in June. The Federal Reserve Bank of New York's press release said “The general business conditions index slipped below zero for the first time since November of 2010, falling twenty points to -7.8. The new orders and shipments indexes also posted steep declines and fell below zero.”
The unfilled orders index, delivery time index, and the inventories index all slipped. The index for number of employees dropped fifteen points to 10.2, while the average workweek index fell 26 points to -2.0. This indicates that while employment levels increased, hours worked decreased slightly.
The press release said, “The indexes for both prices paid and prices received were positive but lower than last month, suggesting that increases in input prices and selling prices had slowed. Although future indexes were generally above zero, they were well below last month’s levels, indicating that the level of optimism about the six-month outlook had deteriorated significantly.” The future general business conditions index reached the lowest level since early 2009 at 22.5.
The survey also included supplementary questions, where respondents were asked “about expected changes in the size of their firms’ workforces and about the factors underlying these changes.” These same questions were asked in January 2011 survey with much more positive results than the current survey. While 41% expected their workforce to increase in the year ahead for the current survey, 52% expected these increases back in January.
“As in January’s survey, high expected sales growth was, by far, the most widely cited factor behind plans to increase employment. Respondents were also queried about anticipated changes in wages and benefit outlays: the vast majority of firms reported that they planned to raise wages by between 0 and 5 percent, while benefits were expected to increase somewhat more,” according to the press release.