Manufacturing professionals in New York are feeling more optimistic in May 2014, according to a recent N.Y. Fed manufacturing survey. The monthly survey showed a dramatic increase, indicating that the industry might finally being seeing signs of growth.
The Empire State Manufacturing Survey, which is released by the Federal Reserve Bank of New York, reported a headline general business conditions index reading of 19.0. May's reading was a significant improvement over April, which came in at just 1.3. In fact, just 18 percent of survey respondents indicated that business conditions had worsened during the month of May.
May's manufacturing survey results came as welcome news for professionals in the manufacturing industry, who have been dealing with slow growth after 2013's economic lag. In March, the index had a reading of just 5.1; in February, it was 4.5. May's index reading was the highest it has been in almost four years, leading industry professionals to hope that conditions might soon start improving steadily. The future general business conditions index, which offers the six-month outlook, came in at 44 – the highest reading in more than two years.
According to the N.Y. Fed manufacturing survey, general business conditions were not the only improvement area for industry professionals. The indexes for new orders and shipments also rose significantly. New orders rose to 10.4, and shipments increased to 17.4. The manufacturing price indexes fell slightly, which indicates that prices are increasing at a slower rate.
Employment in the New York area grew in May, suggesting that employers are taking on more workers to meet increasing demand. The new employees index increased to 20.9, 13 points higher than it was in April. The average work week index stayed the same.
Around the same time that the N.Y. Fed manufacturing survey was released, the Philadelphia Federal Reserve Bank's manufacturing index results for May were also published. The Philly Fed's Business Outlook Survey indicated that manufacturing expanded in May. The May 2014 index reading was 15.4, as compared to an 16.6 reading in April. Despite the lower number, May's reading indicates that the industry is expanding; any reading above zero demonstrates growth. Economists and manufacturing industry analysts often pay close attention to both the New York and Philadelphia manufacturing surveys, as they are the first two to be released each month. With both banks releasing positive information, economists feel positive about the overall state of manufacturing on the East Coast and in the United States as a whole.
For manufacturing professionals, the positive results of the New York Fed manufacturing survey indicate positive things to come in the months ahead. Although analysts do not expect industry growth to continue at such a dramatic rate, they are predicting steady gains in line with economic improvement.
(Photo courtesy of twobee / freedigitalphotos.net)
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