Empire State Manufacturing Survey: Slower Growth In December

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 10.9 was a decrease of 12.4 from the previous month's 23.3.

The Investing.com forecast was for a reading of 20.1.

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 at a slower pace than in recent months in New York State, according to firms responding to the December 2018 Empire State Manufacturing Survey. The headline general business conditions index fell twelve points to 10.9. New orders increased modestly, while shipments continued to climb significantly. Delivery times lengthened slightly, and inventories moved higher. The employment index rose twelve points to 26.1, indicating that employment grew strongly, and hours worked increased modestly. The prices paid index, while still elevated, moved down five points, and the prices received index held steady. Looking ahead, firms remained fairly optimistic about the six-month outlook, though optimism was slightly more tempered than in November. [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 on image to enlarge)

Empire State Manufacturing

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.

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