Manufacturing activity in the New York region surged in March, moving into positive territory for the first time since last July. While economists were expecting the headline reading to come in at a level of -10.50, the actual reading was considerably stronger at +0.62. With regards to the headline reading of the report, where do we start? For starters, it was the strongest report relative to expectations since September 2014. It was also the third largest monthly increase on record and the biggest since December 2010. Finally, this month’s positive reading for March breaks a string of seven straight monthly declines, which was the longest streak of negative readings since August 2008.
The table below breaks down the March Empire Manufacturing report based on each of the index’s components. For each category, we show the m/m change for both current conditions and expectations. As far as current conditions are concerned, there was a lot of strength in New Orders and Shipments, while Inventories saw the largest decline. Prices Paid were unchanged and Prices Received and Number of Employees both saw small declines, but Average Workweek moved back into positive territory. Expectations showed even more broad-based strength. As shown on the right side of the table, the only component that declined was Number of Employees, while New Orders surged to its highest level since January 2015.