Following is the text of the Empire State Manufacturing Index.
The November 2012 Empire State Manufacturing Survey indicates that conditions for New York manufacturers declined at a modest pace. The general business conditions index was negative for a fourth consecutive month, but was little changed at -5.2. The new orders index rose above zero for the first time since June, although it was only slightly positive at 3.1. The shipments index shot up twenty-one points to 14.6, its highest level since May. The prices paid index fell three points to 14.6, indicating a modest increase in input prices, and the prices received index held steady at 5.6. Labor market conditions were noticeably weaker. The index for number of employees fell fourteen points to -14.6, a sharp drop to its lowest level since 2009, and the average workweek index drifted down to -7.9. Indexes for the six-month outlook were mixed, with the future general business conditions index declining seven points to 12.9, while the future new orders and shipments indexes rose.
In a series of supplementary questions, firms were asked about the extent to which their businesses were affected by the “superstorm” Sandy. Among firms based in upstate New York, only 21 percent reported any loss of activity due to the storm--and in most cases, for no more than one day. However, 100 percent of firms in the New York City area reported some reduction in activity. The most widely cited factors contributing to a reduction in business activity were loss of power and loss of communications--reported as major factors by more than 70 percent of downstate businesses.
Business Conditions Decline Modestly
The general business conditions index was little changed in November and, at -5.2, suggested that activity for New York manufacturers continued to decline at a modest pace. Nineteen percent of respondents reported that conditions had improved over the past month, while 24 percent reported that conditions had worsened. In its first positive reading since June, the new orders index climbed twelve points to 3.1, pointing to a small increase in orders. The shipments index rose sharply to 14.6, a twenty-one point increase signaling that shipments were higher. The unfilled orders index remained negative, but rose seven points to -11.2. The delivery time index rose three points to - 1.1, indicating that delivery times were little changed. The inventories index fell ten points to -12.4, a sign that inventory levels were somewhat lower.
Labor Market Conditions Weaken
The prices paid index, falling three points to 14.6, suggested a modest but somewhat slower pace of growth in input prices. The prices received index was little changed at 5.6, pointing to just a slight increase in selling prices. Labor market conditions weakened noticeably. The index for number of employees fell a steep fourteen points to -14.6, its lowest level since mid-2009. The average workweek index fell four points to -7.9, indicating that average workweeks were shorter.
Optimism about Future Business Conditions Wanes
Indexes for the six-month outlook were mixed. The future general business conditions index fell for a second consecutive month, and at 12.9, was at its lowest level since 2009. The future new orders index, however, rose six points to 21.4, and the future shipments index climbed nineteen points to 30.3. The future prices paid index dropped fi ve points to 39.3, and the future prices received index fell nine points to 15.7. Indexes for future employment suggested that fi rms expect employment levels and hours worked to be unchanged in the months ahead. The index for expected number of employees was -1.1, and the future average workweek index was 0.0. The capital expenditures index rose three points to 9.0, and the technology spending index inched down to 5.6.
Supplemental Report: Downstate Manufacturers Report Severe Disruptions from Sandy Supplementary questions in the November 2012 Empire State Manufacturing Survey focused on the extent to which firms were affected by the “superstorm” Sandy. Among firms based in upstate New York, only 21 percent reported any loss of activity due to the storm-- and in most cases, for no more than one day. However, 100 percent of firms in the New York City area-- which also includes Long Island and the lower Hudson Valley (up to Putnam and Orange counties)-- reported some reduction in activity. Moreover, when asked how long (if at all) their business was completely shut down or severely crippled, more than 90 percent of these downstate respondents indicated at least one day, and more than 40 percent reported this status as lasting for five days or more. Businesses in Long Island, including Brooklyn and Queens, reported the most widespread and severe effects from the storm.
In a separate query, respondents were asked to identify the major factors that contributed to a reduction in business activity. The most widely cited problems were loss of power and loss of communications--reported as major factors by more than 70 percent of downstate businesses. Among upstate respondents, the channels through which the storm hurt business--mostly to a minor extent--were the negative effects on the firms’ customers and disruptions to their supply chains.
SOURCE: Federal Reserve Bank of New York