Today’s Empire Manufacturing report for the month of June came in higher than expected with the headline General Business Conditions Index hitting its highest level since October. While economists were forecasting the headline number to come in at a level of 18.8, the actual reading came in at 25.0. This month’s report also marked the 16th straight month that the Empire Manufacturing report has been positive. As the chart below indicates, the index for current conditions (dark blue line) is just over three points below its high for the cycle. Meanwhile, expectations for six months from now, which had cratered in March, has since rebounded nearly all of the ground it originally lost.
The second chart below shows plans for CapEx and Technology Spending over the next six months. Unlike the expectations index for general business conditions, which has bounced back, these two indices continue to drift lower. In fact, plans for Technology spending haven’t been lower than they are now since last August.
The table below breaks down the internals of this month’s report by each of the index’s sub-components. As shown, the indices for current conditions mostly increased in June, while expectations for six months from now weren’t quite as strong. The biggest increases in the current conditions index came from Number of Employees, which saw its largest one-month increase since last September. Also, while the magnitude of the increases wasn’t nearly as large, both New Orders and Shipments saw sizable increases.