Empire State Manufacturing Survey: Modest Growth in April

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 10.10 was an increase of 6.4 from the previous month's 3.70. The Investing.com forecast was for a reading of 6.70.

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 grew modestly in New York State, according to firms responding to the April 2019 Empire State Manufacturing Survey. The headline general business conditions index rose six points to 10.1, indicating that growth picked up somewhat but remained fairly subdued. New orders rose slightly, and shipments continued to grow modestly. Delivery times and inventories both increased. Labor market indicators pointed to ongoing employment gains and a small increase in hours worked. The prices paid and prices received indexes moved lower, pointing to a slowing in both input price increases and selling price increases. Indexes assessing the sixmonth outlook suggested that firms were much less optimistic about future business conditions than last month. [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. We saw a gradual decline in 2015 that began picking up in 2016.

Here is an overlay of the current and future conditions (a six-month outlook).

 

Meanwhile, here's another look at the latest ISM Manufacturing Business Activity Index.

 

Let's compare all five Regional Manufacturing indicators. Here is a three-month moving average overlay of each since 2001 (for those with data).

 

Here is the same chart including the average of the five. Readers will notice the range in expansion and contraction between all regions.