MBS MID-DAY: Flat To Start, Rallying After Opening Bell, Sentiment Helped


– 9.24 vs 10.0 Consensus, 10.04 in Feb
– Employment 3.23 vs 8.08 in Feb
– New Orders 8.18 vs 13.31 in Feb
– 6-Month Outlook 36.43 vs 33.07 in Feb

The March 2013
Empire State
Manufacturing Survey
that conditions for New York
manufacturers continued to improve
modestly. The general business
conditions index was positive
for a second consecutive month
and, at 9.2, was little changed.
The new orders and shipments
indexes also remained above zero,
though both were somewhat lower
than last month’s levels. Price
indexes showed that input price
increases continued at a steady
pace while selling prices were flat.
Employment indexes suggested
that labor market conditions were
sluggish, with little change in
employment levels and the length of
the average workweek. Indexes for
the six-month outlook pointed to an
increasing level of optimism about
future conditions, with the future
general business conditions index
rising to its highest level in nearly
a year.

In a series of supplementary
questions, firms were asked about
cash holdings, debt levels, and
methods of financing capital
spending. Queried about expected
changes in their outstanding debt
in the year ahead, manufacturers
indicated an increasingly
widespread inclination to take
on more debt. When asked about
anticipated changes in cash
holdings in the year ahead, more
respondents anticipated decreases
than increases—for the first time
since 2008. Manufacturers, on
average, also reported that they
were currently holding less cash
than usual.

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