New York Manufacturers See Strong Month

New York Manufacturers See Strong Month

Manufacturers in New York say business conditions improved at a healthy pace in February, according to survey results released Feb. 16 by the New York Federal Reserve Bank. The Empire State Manufacturing Survey’s general business conditions index climbed 9 points, to 24.9.

The general index has climbed steadily, but for a sharp setback in the fourth quarter, since the lowest point of the recession at minus 38.2 in March 2009. It climbed to near zero in July and has been above that flat point since then. The current reading is nearly equal to the level of late 2007 before the fall off toward recession.

New orders and shipments declined slightly, but inventories rocketed 17.33 points to reach zero in the first reading outside of negative territory since August 2008. The inventories index has climbed every month since the low point of minus 36.46 in July 2009.

The prices paid index was little changed from its high level last month, and the prices received index remained just above zero for a second consecutive month.

Employment indexes were positive for a second consecutive month, although at relatively low levels. Future indexes continued to show a high level of optimism about the six-month outlook.

In February’s survey, approximately 64 percent of respondents indicated that they expected their work force to increase in the year ahead, while just 15 percent predicted declines.

“This finding contrasts with last year’s survey results, in which respondents expecting increases in the total work force had outnumbered those expecting declines by just 45 percent to 40 percent. Overall, when asked about the probability of various employment outcomes, respondents were considerably more optimistic than they were last year. The chance that their firm’s employment level would drop 5 percent or more was perceived to be 18 percent, on average, down from 34 percent in last January’s survey,” the New York Fed said.

Contact Thomas L. Gallagher at tgallagher@joc.com.