Following is the text of the Empire State Manufacturing Index. The May Empire State Manufacturing Survey indicates that manufacturing activity expanded in New York State at a moderate pace. The general business conditions index rose eleven points to 17.1. The new orders index inched up to 8.3, and the shipments index shot up eighteen points to 24.1. The indexes for both prices paid and prices received were positive but lower in May, indicating that the pace of price increases slowed. Employment index readings remained relatively healthy, suggesting that employment levels and hours worked continued to expand. Future indexes were noticeably lower than last month, indicating a positive but somewhat less optimistic view of the six-month outlook.
In a series of supplementary questions, firms were asked about past and expected changes in both their input prices (prices paid) and selling prices (prices received). Respondents estimated that the prices they paid increased 3.6 percent, on average, over the past twelve months--down sharply from the 8.1 percent rise reported in last May’s survey. Looking ahead to the next twelve months, respondents on average predicted a price rise of 3.5 percent. Firms reported smaller increases in prices received: the average respondent cited a 1.7 percent increase in selling prices over the past year (down from 1.9 percent in the May 2011 survey) and an expected increase of 2.1 percent for the year ahead. Activity Expands at a Moderate Pace The May index for general business conditions rose a solid eleven points to 17.1, suggesting that activity for New York State’s manufacturers expanded at a moderate pace. A little more than 40 percent of respondents reported that conditions had improved over the month, while 23 percent reported that conditions had worsened. The new orders index inched up two points to 8.3, signaling a modest rise in orders. The shipments index shot up eighteen points to 24.1, its highest level in a year. The unfilled orders index remained negative, at -4.8. The delivery time index fell to zero, and the inventories index inched up four points to 4.8. Prices Increases Slow The indexes for both prices paid and prices received retreated in May. The prices paid index fell eight points to 37.4. Though still elevated and therefore indicative of significant price increases, this index has fallen for the past two months, suggesting that the pace of growth in input prices has been slowing. The prices received index fell seven points to 12.1, signaling a moderate though somewhat slower pace of growth in selling prices. Employment indexes showed reasonable growth in employment levels and hours worked. The index for number of employees was little changed at 20.5, and the average workweek index rose six points to 12.1. Six-Month Outlook Less Optimistic Future indexes were positive, but were generally lower, suggesting that the level of optimism about the six-month outlook was not quite as high as it has been in recent months. The future general business conditions index fell fourteen points to 29.3. The future new orders index fell sixteen points to 30.1, and the future shipments index declined nineteen points to 25.3. The future prices paid index climbed seven points to 57.8, suggesting that input prices are expected to accelerate in the coming months, while the future prices received index held steady at 22.9. Future employment indexes were positive but lower in May. The capital expenditures index fell twelve points to 19.3, and the technology spending index fell six points to 12.1.