Region’s Growth Rate Inches Down

NEW YORK CITY-Optimism about the future continues its gradual downward trend even as business conditions hold steady overall, the Federal Reserve Bank of New York said Wednesday. The New York Fed’s monthly Empire State Manufacturing Survey showed that the general business conditions index remained positive for September, although it slipped 3 points to 4.1. At the same time, the future general business conditions index fell 4 points to 31.3.

On balance, most New York manufacturers still expect business conditions to improve over the next six months, according to the New York Fed. However, this index is at its lowest level since March 2009.

In an encouraging sign for the commercial real estate sector, the survey’s index for number of employees was 14.9, little changed from last month, indicating that employment levels continued to increase in September. The average workweek was virtually unchanged at 7.5.

Almost 35% of respondents said that general business conditions had improved over the month, up from the 30% who said this in August. Yet the percentage that reported worsening conditions increased from 22% in August to 31%.

After falling below zero last month, the new orders index turned positive, rising seven points to 4.3. The shipments index also bounced back this month, rising 11 points to -0.3. The unfilled orders index climbed as well, rising 4 points to -6.0. The delivery time index fell to -11.9, suggesting that delivery times shortened. The inventories index inched down toward zero, indicating that inventory levels remained little changed over the month.

Future employment indexes fell modestly, but remained above zero, which the New York Fed interprets to mean that employment levels are expected to continue to climb in the months ahead. The capital expenditures index rose slightly to 25.4, while the technology spending index climbed to 14.9.

According to published reports, the stock market initially responded pessimistically on Wednesday to the New York Fed report, which came in below projections. Traders managed to shake off the initial disappointment as the day went on, and a comment from David Resler, chief economist at Nomura Securities International, summed up the market’s cautious optimism. “The recovery has lost some of its upward momentum, but does not appear to be in any imminent danger,” Resler told Bloomberg. “We’re getting weak growth, but growth.”