02222017Wed
Last updateTue, 21 Feb 2017 8pm

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Empire State Manufacturing Expands at Fastest Rate Since 2014

Business activity expanded at a solid clip in New York State, according to firms responding to the February 2017 Empire State Manufacturing Survey. The headline general business conditions index rose twelve points to 18.7, its highest level in more than two years. The new orders index climbed to 13.5, and the shipments index advanced to 18.2, pointing to substantial increases in both orders and shipments. The unfilled orders index rose above zero for the first time in more than five years. Indexes for the six-month outlook suggested that respondents remained highly optimistic about future conditions. 


Philly Fed Manufacturing Conditions Continued to Improve in February

The index for current manufacturing activity in eastern Pennsylvania, southern New Jersey and Delaware increased from a reading of 23.6 in January to 43.3 this month and has remained positive for seven consecutive months. The share of firms reporting growth continues to increase: More than 48% of the firms reported increases in activity this month compared with 40% last month. The index for current new orders increased 12 points this month (with 44% of the firms reporting increases and just 6% reporting decreases). The shipments index increased 8 points. Other broad indicators also corroborate growth. Both the delivery times and unfilled orders indexes were positive for the fourth consecutive month, suggesting longer delivery times and an increase in unfilled orders. 

Industrial Production Down 0.3% in January

Industrial production decreased 0.3% in January following a 0.6% increase in December. In January, manufacturing output moved up 0.2%, and mining output jumped 2.8%. The index for utilities fell 5.7%, largely because unseasonably warm weather reduced the demand for heating. At 104.6% of its 2012 average, total industrial production in January was at about the same level as it was a year earlier. Capacity utilization for the industrial sector fell 0.3% in January to 75.3%, a rate that is 4.6% below its long-run (1972–2016) average. The index for manufacturing output rose 0.2% during the month.

Solid Small Business Employment Conditions as 2017 Begins

The Paychex | IHS Small Business Jobs Index continued to increase in January to 100.62, beginning 2017 at the same pace of employment growth it averaged throughout 2016. Up 0.13% in January and 0.10% in December, the national index increased two months in a row for the first time since last February as employment improved 0.21% during the past quarter. All regions increased in January, except for the South Atlantic, which had a slight decrease of 0.09%. Four of the top five states decreased in January, while nine of the bottom 10 states improved. At 104.17, Tennessee has the strongest index and growth rates among states. With moderate gains in January and indexes exceeding 102, Atlanta, Seattle and Dallas top the metro rankings. At 104.73, Other Services remains far ahead among industry sectors, while the high-paying professional and business services, financial activities and manufacturing industries are below 100 to start the year. 

Barriers U.S. Manufacturers Face to Adopt New Technology

According to Automation Alley’s 2017 Technology Industry Report, 85% of national manufacturing executives said their company plans to increase existing budgets for technological advancements, while nearly a third of them plan to increase their budgets by 10% to 15%. In addition, more than half of all national manufacturing executives reported that their company has a dedicated budget for Industry 4.0 technologies. The top three technologies in which companies currently invest are the cloud, cybersecurity and big data and analytics. Locally, the Industrial Internet of Things and simulation (both at 42%), followed by autonomous robots, horizontal and vertical system integration, and the cloud (all at 33%) are a top priority for Automation Alley manufacturers.

While most manufacturers recognize the benefits of technological advancements, barriers to technology adoption remain. Only slightly more than half (52%) of the national manufacturers surveyed have a dedicated budget and process to support the adoption of new technologies. In contrast, 68% of Automation Alley manufacturers reported having a dedicated budget and process to support the adoption of new technologies. 

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