New York Manufacturing Unexpectedly Improves Further to One Year High

Empire manufacturing unexpectedly continued to improve in July, rising to 26.5 (consensus 18) from 25.8 in June, to a new one year high. The expansion in factory activity in the New York region showed up as an almost ten point jump in new orders to 26.5. New orders have been improving for the last four months, and set a new one year high. There was also a significant decline in inventories of over 20 points to -20. Employment shot 8 points higher. Prices paid fell notably, but remain elevated at 34.6, while shipments fell modestly to 29.2. The six month outlook also improved, rising to 48.2 from 44.1. 40% of respondents indicated that they are increasing production plans for the rest of this year. The New York region is more tied to high-tech industries compared to the Midwest's continued emphasis on autos.

The past two months have shown the best two month levels since 2004, as most of the subcomponents show strength. The figures indicate strength in the ISM, and support for the employment, figures for July.