Empire State Manufacturing Sample Healthy In October

October has been an unusually healthy month for Empire State's manufacturing sample, posting a 21.1 overall index for a 2.1 point gain from September and near the top of Econoday's consensus range.

Very good news in the report comes from signs that capacity stress is easing. The sample is getting ahead of orders as shipments surged 12.0 points to 26.3 and backlogs were worked down, now at minus 8.4 for a 13.3 point decline. Inventories of raw materials were drawn down, at 0.8 for a 8.1 point decline, while delivery times improved, input costs eased, and the average workweek was flat at only 0.2 vs September's 11.5.

Given the easing in capacity stress, a big gain for new orders tops off the good news in October, up 6.0 points to 22.5 for a very sharp gain and the highest level since June last year. This report offers the best of both worlds and hints at a very fine 2018 finish for the nation's manufacturing sector.