What is the Empire State Manufacturing Index?

A key barometer of future activity that asks manufacturers in the New York region about expectations six months ahead. The Empire State data is watched closely because it is the first reading of the health of the manufacturing sector in November. It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management. Any reading above zero indicates expansion in the region's manufacturing.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

General Business Conditions Index.

The survey's main index, general business conditions, is not a weighted average of other indicators it is a distinct question posed on the survey. Each index is seasonally adjusted when stable seasonality is detected.

The Empire State Manufacturing Survey and the Philadelphia Fed's

The Empire State Manufacturing Survey has a much shorter history than the Philadelphia Fed's business outlook survey. The two series tend to move in tandem much of the time, although not each and every month. They are both considered leading indicators for the ISM manufacturing survey.

The New York Fed gauge, like the Philadelphia Fed index due out later this week, is a diffusion index, which subtracts the percentage of respondents who say activity fell during the month from those who say it increased. Any reading above zero is considered positive.

The Empire State Manufacturing Survey has a much shorter history than the Philadelphia Fed's business outlook survey. Analysts put more weight on the Philadelphia Fed's index of current activity, which will be after the Empire State Index.

Revisions

Each January, all data undergo a benchmark revision to reflect new seasonal factors.

Seasonal Adjustment

The Empire State Manufacturing Survey seasonally adjusts data based on the Census X-12 additive procedure utilizing a logistic transformation.

The survey is put out by the New York Fed and covers a wide range of economic indicators from general business conditions to new orders, shipments, unfilled orders, delivery times, inventories, prices paid and received, headcount, and average workweek. It also asks businesses for their outlook six months out. It's a relatively comprehensive survey of business conditions, but it concentrates on New York State, which is a small subset of the population. Like most Fed surveys, it employs a diffusion index methodology, asking respondents whether a certain metric is getting better, getting worse, or staying the same. The index value is the percent of respondents who say the metric is getting better less the percent who say it's getting worse.