NY Empire State Index

AAA

DEFINITION of 'NY Empire State Index'

An index based on the monthly survey of manufacturers in New York State – known as the Empire State Manufacturing Survey – conducted by the Federal Reserve Bank of New York. The headline number for the NY Empire State Index refers to the survey’s main index, which summarizes general business conditions in New York State.
 
The index is based on survey responses to a questionnaire sent out on the first day of each month to an unchanged pool of about 200 top manufacturing executives, generally the president or CEO. The questionnaire seeks their opinion on the change in a number of business indicators from the previous month, and also the likely direction of these indicators six months into the future. Also known as the Empire State Manufacturing Index.
 

INVESTOPEDIA EXPLAINS 'NY Empire State Index'

The “general business conditions” component of the index is based on a distinct question posed on the Empire State Manufacturing Survey, and is not a weighted average of the other indicators. These 11 indicators, which are only applicable to the survey respondents' manufacturing facilities in New York State, include the following – new orders, shipments, unfilled orders, delivery time, inventories, prices paid, prices received, number of employees including contract workers, average employee work week, technology spending and capital expenditures. Each index is seasonally adjusted when seasonality is detected.
 
Survey participants are asked to rate the change for each indicator, for “general business conditions” in the previous month compared to the month before, and for six months out. For example, the January survey would ask these executives to rate the change for each indicator compared to December (i.e. “Decrease”, “No change” or “Increase”), and also rate the likely change in six months compared to January.
 
The general business conditions index and the sub-indexes for the other 11 indicators are diffusion indexes calculated by subtracting the percentage of respondents who rate an indicator as “lower”, i.e. a decrease, from those who rate it as "higher”, i.e. an increase. As an example, if 30% of survey respondents thought business conditions had improved in the current month, 50% believed there was no change, and 21% rated conditions as having worsened, the index would show a reading of 9. Index readings are released as absolute numbers (not as percentages) to one place after the decimal.
 
The index is widely watched by professionals and investors for insights on the state and direction of manufacturing in the influential New York State region.
 

RELATED TERMS
  1. Indicator

    Indicators are statistics used to measure current conditions ...
  2. Federal Reserve Bank

    The central bank of the United States and the most powerful financial ...
  3. Unique Indicator

    A technical indicator that can be developed using only core elements ...
  4. Hybrid Indicator

    A technical indicator that combines core elements of chart analysis ...
  5. Natural Gas Storage Indicator - ...

    The U.S. Energy Information Administration (EIA) weekly estimate ...
  6. Flash Manufacturing PMI

    An estimate of the Manufacturing Purchasing Managers' Index (PMI) ...
RELATED FAQS
  1. What economic indicators are especially important to oil traders?

    Economic indicators are used by traders and investors in an attempt to understand the underlying fundamentals of the market. ... Read Full Answer >>
  2. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  3. What types of expenses are factored into autonomous consumption?

    Autonomous consumption is the level of consumption necessary to support everyday life in a zero-income scenario. Put another ... Read Full Answer >>
  4. How can I use a regression to see the correlation between prices and interest rates?

    In statistics, regression analysis is a widely used technique to uncover relationships among variables and determine whether ... Read Full Answer >>
  5. What are some of the key shortcomings of how the U.S. unemployment rate is determined ...

    Each month, the Bureau of Labor Statistics (BLS), a division of the U.S. Department of Labor, announces the unemployment ... Read Full Answer >>
  6. While closely related, how do gross domestic product (GDP) and gross national income ...

    Gross domestic product, or GDP, and gross national income, or GNI, are the two most important economic indicators that measure ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Introduction To Coincident And Lagging Economic Indicators

    Investors can learn a lot, or very little, from these indicators once they know how to use them.
  2. Forex Education

    How To Build A Trading Indicator

    Wondering how people like Elliott and Gann built their famous trading tools? Learn the basics of constructing an indicator.
  3. Economics

    Make Money With The Consumer Cyclical And Staple Indicator

    Knowing the difference between what consumers need and what they want can help you target your stock picks to follow consumer buying trends.
  4. Forex Education

    The Most Reliable Indicator You've Never Heard Of

    The McGinley Dynamic Indicator isn't very well known, but it is a great way to discover market trends.
  5. Bonds & Fixed Income

    How To Use Gross National Product As An Indicator

    Learn what the GNP truly represents, and how its misuse can manipulate the facts.
  6. Mutual Funds & ETFs

    How To Use Gann Indicators

    This trendline-like technical analysis tool has been around for decades - but it still works.
  7. Active Trading

    World's Wackiest Stock Indicators

    Can butter production help you predict the market's next move? Find out here.
  8. Markets

    A Guide To Conference Board Indicators

    Learn to put the CB data sets to trading use. Each chapter takes you through one of the board's benchmark indicators or surveys, their significance and their applications.
  9. Retirement

    Economic Indicators To Know

    The economy has a large impact on the market. Learn how to interpret the most important reports.
  10. Economics

    Why The Dollar’s Strength Can Continue

    Overall, the U.S. dollar has rallied this year, with the Dollar Index (DXY) now up by roughly 8 percent year-to-date, but the gain hasn’t been steady.

You May Also Like

Hot Definitions
  1. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  2. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  3. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  4. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  5. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  6. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!