Empire State Manufacturing Jumps in May

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According to the May 2018 Empire State Manufacturing Survey, business activity grew strongly in New York. The headline general business conditions index rose four points to 20.1, beating out the Bloomberg consensus of 15.5 and indicating a faster pace of growth than in April.

The new orders index rose seven points to 16.0 and the shipments index was little changed at 19.1, suggesting ongoing growth in orders and shipments. Unfilled orders also increased and inventories moved higher.

The delivery time index was close to last month’s level at 13.7, but this is a sign that delivery times are continuing to lengthen.

Labor market indicators pointed to a modest increase in employment and longer workweeks. The index for the number of employees edged up three points to 8.7, while the average workweek index fell to 11.1.

The prices paid index rose to its highest level in several years, indicating significant input price increases, and the prices received index remained elevated. Specifically, the prices paid index moved up seven points to 54.0, its highest level since 2011.

Ultimately looking ahead, firms were somewhat more optimistic about the six-month outlook than they were in April, but less so than earlier this year. The index for future business conditions, which plunged to 18.3 in April after remaining above 40 for most of the past year and a half, regained 13 points to reach 31.1 in May.