Following is the text of the Empire State Manufacturing Index.
April’s Empire State Manufacturing Survey indicates that manufacturing activity in New York State improved modestly. Although the general business conditions index fell fourteen points, it remained positive at 6.6. The new orders and shipments indexes also remained positive, but showed only a small increase in orders and shipments. The prices paid index inched downward but remained high, and the prices received index climbed six points to 19.3. The index for number of employees rose to its highest level in nearly a year, indicating a significant increase in employment levels, while the average workweek index fell to a level that indicated only a small increase in hours worked. Future indexes remained quite positive, suggesting a strong and persistent degree of optimism about the six-month outlook.
In a series of supplementary survey questions--previously posed in August 2011 and March 2007--respondents were asked how much difficulty they had experienced finding workers proficient in mathematical, computer, interpersonal, and other workplace skills. As was the case last August, the most widespread difficulties were cited for advanced computer skills. One skill category that has reportedly grown harder to find is basic math. Interestingly, respondents reported at least as much difficulty finding workers with each of these skills than they did prior to the recession, in March 2007. Responses to other supplemental questions indicated that firms expected wages to rise by 2.3 percent, on average, over the next twelve months, and that, for more than a third of the firms, retaining skilled workers would become increasingly difficult over the next twelve months.
Pace of Expansion Slows
The Empire State Manufacturing Survey’s headline index fell significantly in April, though it still indicated a modest increase in activity. The general business conditions index dropped fourteen points to 6.6, suggesting that while growth continued, the pace slowed over the month. The new orders index was little changed at 6.5, indicating a modest increase in orders, and the shipments index fell twelve points to 6.4, indicating a slower pace of growth for shipments. The unfilled orders index fell six points to -7.2, and the delivery time index dropped three points to 4.8. The inventories index was little changed at 1.2, suggesting that inventory levels held steady.
Prices Continue to Climb
Input price increases remained significant. After rising sharply last month, the prices paid index fell five points to 45.8. Though somewhat lower than in March, this reading was well above the index’s level in the preceding several months. Selling prices also rose noticeably, with the prices received index climbing six points to 19.3. Employment indexes were positive, but moved in opposite directions. Pointing to a healthy increase in employment levels, the index for number of employees rose six points to 19.3, its highest level in nearly a year. The average workweek index fell thirteen points to 6.0, indicating a modest increase in hours worked.
Outlook Remains Favorable
Indexes for the six-month outlook remained favorable, with readings close to last month’s. The future general business conditions index fell four points to 43.1; roughly half of respondents expected conditions to improve in the months ahead. The future new orders index rose four points to 45.8, and the future shipments index was little changed at 44.6. The future prices paid index fell sixteen points to 50.6 - an elevated level to be sure, but lower than in recent months. The future prices received index also retreated, falling nine points to 22.9. The index for expected number of employees fell four points to 27.7, and the future average workweek index declined ten points to 10.8. The capital expenditures index was little changed at 31.3, while the technology spending index dropped seven points to 18.1.