The Empire State Manufacturing Survey index modestly improved and remains in expansion. The key internals were mixed with backlog falling significantly.
Analyst Opinion of Empire State Manufacturing Survey
Because of the movement down of backlog, and improving for new orders – it is hard to say that this report was better than last month.
Econintersect reminds you that this is a survey (a quantification of opinion). Please see caveats at the end of this post. However, sometimes it is better not to look to deeply into the details of a noisy survey as just the overview is all you need to know
From the report:
Business activity continued to grow strongly in New York State, according to firms responding to the October 2018 Empire State Manufacturing Survey. The headline general business conditions index rose two points to 21.1, pointing to a slightly faster pace of growth than in September. New orders and shipments both picked up noticeably. Delivery times continued to lengthen, while inventories held steady. Labor market indicators pointed to a modest increase in employment levels and no change in hours worked. Price indexes edged down but remained elevated, suggesting ongoing significant increases in both input prices and selling prices. Looking ahead, firms generally remained optimistic about the six-month outlook.
z empire1.PNG
The above graphic shows that when the index is in negative territory that it is not a signal of a recession – of 10 times in negative territory (since the Great Recession) – no recession occurred. Conversely, a positive number is likely to be indicating economic expansion. Historically, when it does make a correct negative prediction it can be timely – this index was only two months late in going negative after what was eventually determined to be the start of the 2007 recession.
