Empire State Manufacturing Index
The Empire State Manufacturing Index is a report specific to New York State, USA, but it has a broad impact on the overall economy, influencing both executives and investors. This article provides a summary prepared by Traderider to help you understand what this report indicates.
What is Empire State Manufacturing Index?
The Empire State Manufacturing Index is a manufacturing index for New York State based on a survey of 200 manufacturers in the state. The Empire State Manufacturing Index report is like a monthly report on the manufacturing industry in New York, asking about various aspects such as orders, production levels, shipments, and even plans to hire more employees.
What does the Empire State Manufacturing Index number indicate?
The New York State Manufacturing Index is reported as a diffusion index, and the interpretation of the numbers is as follows:
Positive number: Indicates that manufacturing activity is expanding. For example, if data is collected from 200 manufacturers and 180 report increased production while 20 do not, the result will be a positive number because the increases outweigh the decreases.
Negative number: Indicates the opposite, that manufacturing activity is contracting. For instance, if 10 manufacturers report increased production but 190 report no increase or a decrease, the result will be a negative number because the decreases outweigh the increases.
A number at or near zero: Suggests that the positive and negative responses are balanced, meaning manufacturing activity is relatively stable or stagnant.
How does the Empire State Manufacturing Index affect the USD dollar and gold?
A higher index number indicates growth in New York State’s manufacturing activity, which causes the price of the USD dollar to rise. A higher or positive figure builds investor confidence that the economy is doing well. Additionally, increased manufacturing activity leads to more exports, which in turn raises the demand for USD dollars to purchase those goods.
However, if the index contracts or turns negative, it raises concerns about a shrinking U.S. economy. Investors then tend to seek safer assets or more stable currencies, causing the value of the USD dollar to decline. Investment always involves risks, and accepting some loss is necessary to gain profit. Therefore, traders and investors should thoroughly study and understand the market before seeking profits in the Forex market.
