The Empire Manufacturing Index is released by the New York Federal Reserve and provides a look at how well (or how poorly) manufacturers are doing in New York. Although the survey is narrow in scope, it is the first peek at how manufacturers are doing in the current month, so it does get some attention.
And that first look provided a bit of good news, as the Empire survey jumped 9 points to 24.9 in February. A reading above zero signals that companies are expanding production.
Manufacturers have now moved forward for seven consecutive months, while employment, which has been hit very hard during the recession, moved ahead for the second straight month.
Later in the week, the Philly Fed’s Business Activity Index will offer a move in-depth look at manufacturing.
Solid manufacturing recovery thus far
At this point in the business cycle, manufacturing has been one of the bright spots in what has otherwise been a sluggish recovery.
Reason: the severe cutbacks in production over a year ago helped to whittle away excess inventories. Companies are now ramping up production in order to replace depleted stockpiles.
This cycles won’t last forever, and improving consumer demand is needed in order to put the recovery on a more permanent and sustainable path. With consumer confidence gradually coming back to life, demand should eventually pick up.
Job creation would go a long way in boosting confidence and demand. At this juncture, that may be slow to occur.
0 comments:
Post a Comment