October 2009 Report

Survey Indicators
Seasonally Adjusted

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved significantly in October. The general business conditions index climbed 16 points to 34.6, its highest level in five years. The new orders index rose 11 points, and the shipments index shot up 30 points, to 35.1. Both employment indexes were positive for the first time in more than a year. Price indexes were little changed, with the prices paid index remaining positive while the prices received index hovered just below zero. Future indexes advanced to relatively high levels, indicating that respondents expect conditions to improve further in the months ahead.

In response to a series of supplementary questions on credit issues, manufacturers reported that credit conditions have tightened over the past year while firms’ borrowing needs have eased (see Supplemental Report tab). Over the past three months, however, there appears to have been little change in borrowing needs and only a modest decline in credit availability, on net. The survey also points to increased borrowing costs over the past three months, but little change in credit limits (ceilings). These findings are fairly close to those obtained in March, when these questions were previously asked.

Widespread Improvement Continues
In October, the general business conditions index rose for a fourth consecutive month, climbing 16 points to 34.6, its highest level since mid-2004. Just over half of the respondents reported that conditions had improved over the month, while just 17 percent reported that conditions had worsened. The new orders index rose 11 points, to 30.8. The shipments index soared 30 points to a multiyear high of 35.1. The unfilled orders index rose above zero for the first time in more than a year, reaching 2.6. The delivery time index held just above zero at 3.9. The inventories index remained fairly deep in negative territory, although it moved up several points, to -18.2.

Employment Levels Rise
Price indexes were little changed from September levels. The prices paid index, at 19.5, was positive for a fourth consecutive month, and the prices received index remained negative at -5.2. Both employment indexes were positive for the first time in more than a year. The index for number of employees leapt 19 points to 10.4. A little more than one-quarter of respondents reported that they had increased employment levels in October, while 16 percent said that they had reduced the number of workers. Continuing a pattern seen over the past few months, the average workweek index rose sharply, moving up 15 points to 20.8.

Higher Levels of Activity Expected to Persist
Future indexes rose from the already high levels observed in September. The future general business conditions index climbed 3 points, to 55.7, and the new orders and shipments indexes advanced to similarly elevated levels. Future price indexes remained above zero, suggesting that both prices paid and prices received were expected to increase in the months ahead. The pace of input price increases was expected to slow, with the future prices paid index declining 12 points to 24.7, while the prices received index was little changed at 10.4. Employment was expected to rise over the next six months. Future employment indexes remained well above zero, with the future index for number of employees climbing 10 points to 18.8. The capital expenditures index rose 4 points, to 18.2, and the technology spending index advanced to 13.0.