The Empire State Manufacturing index dipped five points and is back in the red at -4.2 after a brief stint in positive territory.

The Econoday Consensus Estimate was for a reading of +2.50 but once again economists were on the optimistic side.


The New York region’s manufacturing sector remains flat based on the Empire State index which came in slightly below zero at minus 4.21 in August vs plus 0.55 in July. New orders are especially flat, at plus 1.04 vs July’s minus 1.82, with unfilled orders extending a long run of negative readings at minus 9.28. There is, however, strength in shipments, at 9.01, but it won’t last long given the weakness in orders. Employment is also flat, at minus 1.03. Prices are steady with input pressures moderate and easing and selling prices fractionally higher. A special negative in the report is a 5.50 point decline in the 6-month outlook to 23.74 which is the least optimism this sample has shown since February. Hit by weak global demand and weak demand for capital goods, the factory sector has yet to get in gear this year and this report, the first for August, doesn’t point to any improvement.

Last month, ahead of the release, Econoday had this to say.

Recent History

The Empire State index has been trying to get into the air, posting a plus 6.01 in June for the third positive reading in four months. Forecasters see more of the same for July, at a consensus plus 5.00. New orders came in at a strong 10.90 in June which points to general strength through the July report. This report will offer the first anecdotal look at the immediate effects, if any, from Brexit on the U.S. factory sector. Of special interest will be the 6-month outlook which, at 34.84, was at its best level of the year in June.

That did not come close. Last month I reported Empire State Manufacturing Index Barely Above Zero, and this month the index is negative again which somehow translates to “flat”.

Empire State Details

Let’s dive into the Empire State Manufacturing Survey for more details.

Business Activity Wanes

Manufacturing firms in New York State reported a slight weakening of business activity in August. The general business conditions index moved lower for a second consecutive month, falling five points to -4.2. Twenty-six percent of respondents reported that conditions had improved over the month, while 30 percent reported that conditions had worsened. The new orders index rose three points to 1.0, suggesting that orders were little changed. The shipments index advanced eight points to 9.0, pointing to an increase in shipments. The unfilled orders index inched up to -9.3. The delivery time index fell to -4.1, signaling shorter delivery times, and the inventories index remained negative at -4.1, evidence that inventory levels were somewhat lower.

Empire State Index

Empire State 2016-08-15

Empire State Index Detail

Empire State 2016-08-15A

Struggling to Stay in Positive Territory

It’s been a struggle fro the Empire region for 17 consecutive months starting April 2015. Of the last 13 months, the index was positive only 4 times, twice by less than a single point.

Mike “Mish” Shedlock