Economist's Insights

Downside Surprise in May’s Empire Manufacturing Survey

May 15, 2017

The May Empire State Manufacturing Survey was much weaker than expected as metrics tracking current conditions and expectations for six months from now were generally softer relative to April’s levels. The headline index fell 11 points to its first negative result since October of last year. Disappointingly, the biggest declines in May’s current conditions occurred in the new orders and unfilled orders indices. As has been the case for multiple economic data sets, the forward-looking expectations fared better than the actual current data. While many of the indices tracking expectations for six months from now were a bit weaker than in the April survey, new orders expectations improved in May and most other indices remained positive relative to recent historical trends. However, the biggest blemish in the forward looking data was a 14 point drop in the capital expenditures index (lowest since November).