This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at 17.0 was an increase of 13.3 from the previous month’s 3.7. The Investing.com forecast was for a reading of 6.0.
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 expanded at a solid clip in New York State, according to firms responding to the September 2020 Empire State Manufacturing Survey. The headline general business conditions index climbed thirteen points to 17.0. New orders increased modestly, and shipments grew significantly. Unfilled orders continued to decline. Inventories edged slightly lower, and delivery times were somewhat longer. Employment was again little changed this month, though the average workweek picked up. Input prices increased at a faster pace than in August, and selling
prices continued to increase modestly. Looking ahead, firms remained optimistic that conditions would improve over the next six months. [full report]
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 two complete business cycles 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 picked up in 2016, with a giant dip in 2020 due to COVID-19.
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(NYSEARCA:XLI) 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.
Here are the remaining four monthly manufacturing indicators that we track: