Why I Like the Empire State Manufacturing Survey

Why is the Empire a useful survey?  It’s admittedly second-order importance indicator, but here is why I like it (besides being a New Yorker!):

1) It’s one of the first gauges of what is actually going on in February (most official data is January or even Q4 or Dec).

2) It is a good partial substitute for the broader surveys like PMI and ISM, that don’t come out for another week.

3) Empire, for whatever reason, tends to track New Orders, though that is also similar to the overall headline manufacturing PMI. See attached for a comparison. The survey also includes its own New Orders # and includes forward expectations for all the indicators, but I never dig in that deep.

In summary: it is a leading indicator that’s actually released relatively early.

Philly Fed is also useful, it comes out next and like NY/Empire has the usual breakdowns into sub-categories.

Finally, as far as the headline # today goes, it was rather poor: worse than expected and barely an improvement from January’s. The breakdown is also shown below:

(Bloomberg) — Following is a summary of New York manufacturing activity index from the New York Federal Reserve.

==========================================================================
                   Feb.   Jan.   Dec.   Nov.   Oct.   Sept.   Aug.
                   2016   2016   2015   2015   2015   2015    2015
==========================================================================
General Business ------------------Diffusion Index------------------
Conditions        -16.64 -19.37  -6.21 -10.06 -11.41 -12.86  -12.79
------------------------------------------------------------------------------
Prices Paid         2.97  16.00   4.04   4.55   0.94   4.12    7.27
Prices Received    -4.95   4.00  -4.04  -4.55  -8.49  -5.15    0.91
New Orders        -11.63 -23.54  -6.18 -11.75 -16.98  -12.52 -14.57
Shipments         -11.56 -14.39   4.62  -3.03  -8.79  -8.07  -12.65
Delivery Time      -1.98 -13.00  -8.08 -10.91 -11.32  -6.19   -4.55
Inventories         0.00  -6.00 -12.12 -17.27  -7.55 -18.56  -17.27
Unfilled Orders    -6.93 -11.00 -16.16 -18.18 -15.09  -8.25   -4.55
Number of Employees-0.99 -13.00 -16.16  -7.27  -8.49  -6.19    1.82
Average Workweek   -5.94  -6.00 -27.27 -14.55  -7.55 -10.31   -1.82

 

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