Today’s release of the Empire Manufacturing report for the month of March came in weaker than expected for the fifth time in the last six months. While economists were anticipating a level of 8.0 in the headline index, the actual level came in at 6.9, down from last month’s reading of 7.78. While current conditions were slightly weaker versus last month, expectations for conditions six months from now improved from 25.6 last month to 30.7, partly erasing February’s large decline (top chart below). Although expectations for conditions six months out improved, CapEx and Tech spending plans were down notably. In terms of CapEx, it was the biggest one month decline since June 2013, while plans for Tech Spending had the largest one month decline since February 2014 (lower chart).
The table below summarizes the internals of this morning’s March Empire Manufacturing report. As shown, of the nine sub-categories, six declined in March, while just three showed a month over month improvement. On the downside, the New Orders index actually showed contraction, falling to its lowest level since November 2013. Two of the three categories showing improvement were Number of Employees (highest since May 2014) and Average Workweek (highest since August 2014).