After four straight months of declines, the General Business Conditions for the Empire Manufacturing report came in better than expected this month. While economists were forecasting a slight increase to 15.0 from last month’s level of 13.1, the actual reading came in at 22.5, which is the highest since last October. Over the last few months, even as the General Business index declined, the index for expectations six months out continued to improve. In this month’s report, we saw a bit of a reset as the current conditions index bounced, and the expectations index pulled back.
Plans for Technology Spending and Capital Expenditures both pulled back for the second straight month after a torrid run to multi-year highs.
Looking at the internals of the report, the trend we mentioned above where current conditions improved and expectations declined is also evident. As far as Current Conditions are concerned, “Number of Employees” was the only category that declined, while most of the indices regarding expectations declined. A couple of other highlights worth pointing out in the internals of the report are that the index of current Shipments rose to its highest level since October 2009 and Delivery Times hit the highest level in the history of the survey (dating back to 2001). Finally, current levels of Prices Paid and Prices Received were the highest since early 2012.