U.S. November Empire State Manufacturing Index (Text)
Following is the text of the Empire State Manufacturing Index.
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers held steady in November. After a string of five consecutive months of negative readings, the general business conditions index rose nine points, to 0.6. While the new orders index edged down to -2.1, indicating that orders were a little lower, the shipments index rose to 9.4, indicating an increase in shipments. The inventories index fell to -12.2--a sign that inventory levels dropped. The prices paid index continued to move downward, reaching 18.3, its lowest level in nearly two years; the decline suggested that the pace of input price increases slowed further in November. The prices received index rose slightly, to 6.1, evidence that selling prices continued to increase. Employment indexes were mixed: employment levels were slightly lower and the average workweek slightly longer. Future indexes surged, indicating a widespread expectation that conditions would improve in the months ahead, with the future general business conditions index rising to its highest level since May.
Supplementary questions to the November 2011 Empire State Manufacturing Survey focused on cash holdings and debt financing; identical questions had been asked in the past few November surveys. Respondents indicated a growing inclination to take on more debt: nearly 30 percent of manufacturing respondents--up from 18 percent in the November 2010 survey and 16 percent in the 2009 survey--said that they expected debt levels to rise. Still, a sizable proportion--slightly more than a third--anticipated declines in debt levels. In response to a parallel question about cash holdings, 41 percent of manufacturers said that they expected these holdings to increase over the next year, while 23 percent expected them to decline-- about the same percentages as in last year’s survey. When asked how they would fund capital spending over the next twelve months, respondents reported that they planned to finance 56 percent, on average, with cash, and roughly 30 percent with debt--results that differed little from those in the 2010 and 2009 surveys.
Input Price Increases Continue to Slow Input price increases slowed noticeably over the month. The prices paid index fell four points to 18.3, resulting in a cumulative decline of more than fifty points in this index since it reached a cyclical peak in May. The prices received index inched upward two points to 6.1, indicating that selling prices climbed at a slightly more rapid pace than in October. Employment indexes were mixed, showing a slight decrease in employment levels and a slight increase in the length of the average workweek. The index for number of employees fell to -3.7, while the average workweek index climbed to 2.4.
Future Indexes Surge The future general business conditions index shot up thirty-two points to 39.0, reaching its highest level since May, with almost half of the respondents expecting conditions to improve over the next six months. The future new orders index climbed twenty-three points to 35.4, and the future shipments index rose nineteen points to 36.6. The future inventories index rose above zero to 2.4, indicating that inventory levels are expected to rise slightly. The future prices paid index inched down to 36.6, while the future prices received index rose several points to 25.6. Future employment indexes were positive and higher than last month, suggesting that employment levels and hours worked are expected to rise. The capital expenditures index rose eighteen points to 25.6, and the technology spending index rose eleven points to 12.2.
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