New York manufacturing is clearly recovering along with the economy with the Empire manufacturing index at it's highest point in four years as of July 2014. Some areas contributing to the state's manufacturing growth include automobiles, fabricated metal products, electrical products and appliances. According to Reuters, this manufacturing growth is evidence of New York's overall economic recovery.
Evidence of manufacturing growth can be seen in the month of May with an increase of 0.6 percent in factory production. The Empire State general business conditions index jumped from 19.01 in May to 19.28 in June, which is the highest reading it has reached since June of 2010, according to Business Insider. Economists had predicted a slight drop in manufacturing growth to around 17.0, so the July high of 25.60 has come as a big surprise. The NY Fed states that new orders have not experienced much of a change, but the shipment index has increased by a full nine points.
The NY Fed also claims that the index of prices paid and received has increased in July. This indicates that price increases are underway. Although hiring slowed in the earlier months of 2014, it picked back up by several points in July, and economists predict that employment levels are sure to continue rising in the coming months. The government's job report shows that manufacturers have added 16,000 jobs in June alone. Reports also indicate that manufacturing employees have been working longer hours. According to Finance & Commerce, auto sales are the highest they've been in eight years as New York residents have begun buying more cars. Sales of computers as well as steel and other metals have also increased.
As of July, manufacturing growth in New York has increased for five consecutive months. The six-month forecast has decreased slightly from 39.8 to 28.5, but manufacturers continue to be optimistic. Economists do not expect the dramatic increase in manufacturing to continue, but overall continued growth in the coming months is still anticipated. Analysts predict that New York manufacturing has grown 3 to 4 percent in the second quarter. The New York and Philadelphia reports, which are some of the first reports released each month, give economists a good idea of how the East Coast is faring as a whole.
Although the first quarter may have given economists a grim outlook for New York, the second quarter jump in manufacturing growth signifies that the state is well on its way to economic recovery. In addition to rising numbers, the pace of manufacturing growth is the fastest it has been in more than two years according to Finance & Commerce. Many factors are involved in judging economic recovery, but manufacturing growth is generally a good indicator.
Photo courtesy of Vichaya Kiatying-Angsulee at FreeDigitalPhotos.net
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