July 2009 Report

Survey Indicators
Seasonally Adjusted

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers were flat in July. The general business conditions index increased to a level close to zero, rising 9 points, to -0.6. The new orders index rose above zero for the first time in several months, and the shipments index also climbed into positive territory. The inventories index slipped to a record-low -36.5. The prices paid index rose above zero for the first time since November, while the prices received index held below zero. Employment indexes remained well below zero. Future indexes continued to be relatively optimistic about the six-month outlook, but were somewhat less buoyant than in June. The capital spending index fell several points, but remained above zero.

In a series of supplementary questions (see Supplemental Report tab), the median respondent indicated that total sales had fallen 15 percent from the first half of 2008 to the first half of 2009, and that the number of employees had decreased 10 percent. Declines for the full year were expected to be of the same respective magnitudes. The same questions were asked in July 2008; in that survey, sales had been seen as rising 5 percent, with employment levels being little changed. When asked if they had recently modified their production plans for the second half of 2009, close to 63 percent of respondents reported that they had scaled back plans, while just 21 percent indicated that they had increased them. This result reflects a much more negative assessment than what was reported in last July’s survey. In response to an additional set of questions new to this survey, manufacturers generally reported little effect thus far from the economic stimulus package.

General Business Conditions Index Rises, Holds around Zero
The general business conditions index rose several points in July, hovering around zero for the first time since last summer, at -0.6—suggesting that conditions neither worsened nor improved over the month. Twenty-three percent observed that conditions improved, less than the 28 percent reporting so in June, while 24 percent said that conditions worsened, well below the 38 percent who saw deteriorating conditions in June. The new orders index rose above zero for the first time since September 2008, climbing from -8.2 to 5.9. The shipments index rose similarly, from -4.8 to 11.0, its highest level in a year. The unfilled orders index held steady at -12.5. The delivery time index fell 4 points, to
-14.6, and the inventories index declined 11 points, to -36.5, a record low.

Input Prices Resume Increase
After several months of readings below zero, the prices paid index rose 16 points, to 10.4, the first positive value since November 2008, indicating that input prices are once again on the upswing. The prices received index remained negative, inching up 4points, to -8.3. Employment indexes remained negative and near June readings. The number of employees index was -20.8, and the average workweek index was -19.8.

Outlook Remains Favorable
The six-month outlook remained favorable in July, although future indexes were somewhat lower than last month. The future general business conditions index fell 14 points, but at 34.0 was well above the very low levels of earlier this year. The future new orders and shipments indexes also declined similarly. The future prices paid index rose 16 points, to 26.0, while the future prices received index held just below zero. Future employment indexes were positive. The capital expenditures index slipped 9 points, to 2.1, while the technology spending index held steady at 1.0.