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US: Empire State Manufacturing Index
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Index | 7.8 | 4.0 to 9.0 | 19.6 | 11.0 | 11.0 |
Highlights
The general business conditions index in the New York Fed Empire State survey of manufacturing is up to 19.6 in May after 11.0 in April. The May increase is well above the consensus of 7.8 in the Econoday survey of forecasters. It is also the highest since 34.4 in December 2021 when activity was brisk during the recovery from the pandemic when there was plenty of stimulus from monetary policy. Survey respondents are reacting to solid increases in the pace of new orders and increasing backlogs of orders to support activity in the coming months. The index for future business conditions rebounds to 33.5 in May after falling to 19.3 in April from 31.0 in March. The region's manufacturers are more confident after the shock from the start of the war on Iran.
The jump in energy costs and the ripple into services like transportation pushes the prices paid index up to 62.6 in May after 51.0 in April and 36.6 in March. The May index is the highest since 65.7 in July 2022. Manufacturers are at least partially passing on those increased costs. The index for prices received is up to 31.8 in May, a sharp increase from the pace seen with the index at 21.8 in April and 21.4 in March. The May prices received index is the highest since 35.2 in August 2022.
The new orders index is 22.7 in May after 19.3 in April. The index for order backlogs is 4.9 in May after 9.1 in April. Manufacturers are ramping up production to fill the incoming orders and get them to customers. The index for shipments is 18.9 in May after 20.2 in April. However, the delivery times index is up to 20.4 in May from 12.1 in the prior month which points to some delays along the supply chain. Inventories are on the rise with that index at 9.7 in May from 5.1 in April.
The region's manufacturers are hiring steadily. The employment index is 8.3 in May after 9.8 in April with the pace only slightly slower from the prior month. The average workweek index is 11.5 in May from 13.7 in April. Factories are adding hours to fill orders but with rising payrolls are not adding as many.
Market Consensus Before Announcement
Business activity expected to maintain moderate pace of expansion with the index at 7.8 in May versus 11.0 in April.
Definition
The New York Fed conducts this monthly survey of manufacturers in New York State. Participants from across the state represent a variety of industries. On the first of each month, the same pool of roughly 200 manufacturing executives (usually the CEO or the president) is sent a questionnaire to report the change in an assortment of indicators from the previous month. Respondents also give their views about the likely direction of these same indicators six months ahead.
Description
Investors track economic data like the Empire State Manufacturing Survey to understand the economic backdrop for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers a moderate growth environment that won't generate inflationary pressures. The Empire Manufacturing Survey gives a detailed look at New York state's manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on the markets. Some of the Empire State Survey sub-indexes also provide insight on commodity prices and other clues on inflation. The Federal Reserve closely watches this report because when inflation signals are flashing, policymakers can reset the direction of interest rates. As a consequence, the bond market can be highly sensitive to this report. The equity market is also sensitive to this report because it is the first clue on the nation's manufacturing sector, reported in advance of the Philadelphia Fed's business outlook survey.
