This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 19.4 was a decrease of 10.8 from the previous month’s 30.2.

The Investing.com forecast was for a reading of 26.0.

The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.

Here is the opening paragraph from the report.

Business activity continued to grow strongly in New York State, according to firms responding to the November 2017 Empire State Manufacturing Survey. Though the headline general business conditions index fell eleven points from the multiyear high it reached last month, it remained firmly in positive territory at 19.4. The new orders index climbed to 20.7 and the shipments index came in at 18.4—readings that pointed to ongoing solid gains in orders and shipments. Delivery times were slightly shorter than last month, and inventory levels edged higher. Labor market indicators reflected moderate employment gains and little change in hours worked. Both input prices and selling prices rose at a pace that was little changed from last month. Indexes assessing the six-month outlook suggested that firms were very optimistic about future business conditions. [source]

Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:

Click this link to access a PDF set of charts of the individual components over the past 12 months.

Since this survey only goes back to July of 2001, we only have one complete business cycle with which to evaluate its usefulness as an indicator for the broader economy. Following the Great Recession, the index has slipped into contraction multiple times, as the general trend slowed. 2015 saw a gradual decline that picked up in 2016.