Empire State Manufacturing Survey Points To Solid And Sustainable Growth

At 8.8 and near expectations, the headline may look tame but February's Empire State report is very positive pointing to solid and sustainable growth. New orders more than doubled to 7.5 and was a likely factor behind one of the report's biggest positives, a doubling in the 6-month outlook, to 32.3 from 17.8. Shipments slowed by 7.5 points but are still positive at 10.4 with employment also slowing, down 3.3 points to 4.1.

But a little slowing can be a good thing, helping to limit the risk of capacity stress. And delivery times are slowing this month but only modestly while input costs remain elevated, though a little less elevated at 27.1 vs January's 35.9. The average workweek for the sample did increase but only slightly, at 2.5.

The last couple of years have seen very strong readings through most of the regional and private manufacturing reports though slowing did appear and clearly so going into year-end last year. Stability for these reports, such as the high single digits for Empire State's headline, would be a welcome pace for this year's manufacturing sector. This report offers the first anecdotal look at February's factory conditions while industrial production, which is coming up shortly this morning, will offer the first definitive assessment of January's conditions.