Written by Jill Mislinski

This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions at -16.6 (-16.64 to two decimals) shows a slight improvement from last month’s -19.37, but signals a continued decline in activity. This indicator has been in negative territory for the last seven consecutive months.

The Investing.com forecast was for a reading of -10.0.

The Empire State Manufacturing Index rates the relative level of general business conditions in New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.

Here is the opening paragraph from the report.

The February 2016 Empire State Manufacturing Survey indicates that business activity continued to decline for New York manufacturers. The headline general business conditions index edged up three points, but remained firmly in negative territory at -16.6. The new orders and shipments indexes indicated an ongoing decline in both orders and shipments. Price indexes suggested a slight increase in input prices and a small drop in selling prices. Employment levels steadied, while the average workweek index pointed to a decrease in hours worked. The six-month outlook remained weak, with the index for future general business conditions up only slightly from last month’s multi-year low.

Here is a chart of the current conditions and its 3-month moving average, which helps clarify the trend for this extremely volatile indicator:

Click this link to access a PDF set of charts of the individual components over the past 12 months.

Since this survey only goes back to July of 2001, we only have one complete business cycle with which to evaluate its usefulness as an indicator for the broader economy. Following the Great Recession, the index has slipped into contraction multiple times, as the general trend slowed. It had remained in a relatively narrow range over the past year. The latest reading is a 2.7 point increase from last month.