Empire State manufacturing back in expansion mode

Business conditions in the New York region improved more than expected, moving back into expansion territory, according to a survey from the New York Fed.

The Empire State manufacturing index rose 15 points to 6.0, by far exceeding economists’ expectations of a reading of -4.0.

The new orders index and the shipments index rose from negative readings to 10.9 and 9.3, respectively.

Meanwhile, the index for future business conditions rose six points to 34.8, hitting its highest level this year.

Pantheon Macroeconomics said: "Overall these data are consistent with the idea that the sharp slowdown in manufacturing activity last year is now over, thank to the slowing decline in oil sector capex, the weaker dollar, and stronger import demand from China.

"The Empire State index does not always move in the same direction as the national ISM manufacturing index but it does follow a similar broad trend, and it now points to the ISM rising to about 53-to-54. That's not manufacturing boom territory, but it is a vast improvement on the December low, 48.0."