Tuesday, February 17, 2009

Regional manufacturing survey #1 plummets

The NY Fed released its regional manufacturing survey results (the first of a series of regional surveys on manufacturing). The index fell to a new low, -34.70, declining sharply since January 2009. From the NY Fed:
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in February. The general business conditions index fell to a new low of -34.7. The new orders index also fell to a new low, the unfilled orders index stayed close to its recent record low, and the shipments index—despite a slight improvement—remained negative. The indexes for both prices paid and prices received held below zero, with the latter dropping sharply. Employment indexes remained deep in negative territory; the average workweek index slipped to a record low. The future general business conditions index was negative for a second consecutive month as many of the forward-looking indexes remained close to recent lows. The future index for number of employees fell particularly sharply, eclipsing last month’s record low.
This is bad news, especially when much of the silver lining argument is centered around a falling rate of decline in manufacturing, which is based on the Jan. bump in the ISM (Institute for Supply Management) national manufacturing survey. And furthermore, the 6-month outlook survey continues to decline.

I will be watching these regional Fed manufacturing surveys over the month, but the Empire State report does not paint a pretty picture for the national ISM manufacturing survey that will be released on March 2. Unfortunately, the bad news keeps on coming.

Rebecca Wilder


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