The Empire State Manufacturing index showed continued strength this morning as the positive trend in regional manufacturing advances higher. New orders were strong, employment improved, prices rose sharply and future confidence has improved substantially. This report is largely in-line with recent reports that have shown widespread economic improvement (via the NY Fed):
“The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved in January. The general business conditions index rose 2 points to 11.9. The new orders index moved up 10 points to 12.4, and the shipments index surged 18 points to 25.4. After a sharp decline last month, the inventories index rose above zero. Employment indexes also climbed into positive territory. Both the prices paid and prices received indexes rose, pointing to an acceleration in both input prices and selling prices. Future indexes conveyed a high level of optimism, with the future general business conditions index advancing to a level not seen since early 2010, while future price indexes climbed to multiyear highs.
Future indexes were at relatively high levels, suggesting that manufacturers widely expected conditions to continue improving over the next six months. The future general business conditions index rose 10 points to 59.0, with 61 percent of respondents expecting conditions to be better in six months. The future new orders and shipments indexes remained at similarly high levels. The future inventories index rose 16 points to 14.7, a record high, indicating that inventory levels were expected to increase in the near future as business activity improved. Future price indexes, already elevated, inched higher—a sign that respondents expected both input prices and selling prices to accelerate. Future employment indexes, though slightly lower, were positive, indicating that employment levels were expected to continue increasing. The capital expenditures index moved up significantly, to 34.7, and the technology spending index edged up to 22.1.”