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Business Title: Manufacturing in New York Fed Region Expands at Faster Pace as Sales Grow Feb. 16 (Bloomberg) -- Manufacturing in the New York region expanded in February at the fastest pace in four months as companies boosted payrolls in anticipation of accelerating orders and sales. The Federal Reserve Bank of New York’s general economic index rose to 24.9 this month, higher than anticipated, from 15.9 in January. Readings above zero in the so-called Empire State Index signal growth in the area covering New York and parts of New Jersey and Connecticut. Manufacturers are increasing output to replenish depleted inventories as business and consumer spending pick up and exports surge. The factory expansion may persist for months, leading to gains in hiring and incomes that will probably also give the rest of world’s largest economy a lift. “As the recession appears to have ended, confidence is building and people are more apt to make new orders,” said Tom Simons, an economist at Jefferies & Co. in New York, who forecast an index reading of 22. “It’s indicative of continued good strength in the manufacturing sector.” Economists forecast the New York Fed’s index would increase to 18 in February, according to the median of 49 projections in a Bloomberg News survey. Estimates ranged from 7.5 to 28. Stock-index futures rose and Treasury securities fell. Futures on the Standard & Poor’s 500 Index expiring in March gained 0.5 percent to 1,084.2 at 8:56 a.m. in New York. The yield on the 10-year Treasury note rose 3 basis points to 3.72 percent as trading resumed after the yesterday’s Presidents’ Day holiday. A basis point is 0.01 percentage point. Employment, Orders The New York Fed’s gauge of employment increased to 5.6 in February from 4 last month. Measures of the six-month outlook for new orders and shipments increased. The gauge of orders rose to 55.6, the highest since February 2006, from 52. A measure of sales also increased to 55.6, the highest since January 2006. A gauge of current shipments fell to 15.1 from 21.1, while the new factory orders measure declined to 8.8 from 20.5. The inventory index rose to zero from minus 17.3, showing companies have stopped drawing down stockpiles. February marked the first month since August 2008 that companies weren’t depleting inventories. A gauge of prices paid fell to 31.9 from 32, while prices received increased to 4.2 from 2.7. A gauge measuring the outlook six months from now declined to 52.8 from 56, according to the Fed report. Industrial Production Another Fed report tomorrow may show industrial production rose in January for a seventh consecutive month. Output at factories, mines and utilities probably climbed 0.8 percent following a 0.6 percent December increase, according to the median forecast of economists surveyed by Bloomberg. Inventory replenishment and more investment in equipment and software are boosting output and helping the economy recover from its worst recession since the 1930s. Purchases of equipment and software increased at a 13 percent pace in the fourth quarter, the most since 2006, the Commerce Department said on Jan. 29. Fairfield, Connecticut-based General Electric Co., the world’s biggest maker of power-plant turbines, said it’s looking to acquire smart-grid products and will fund more research in that area as utilities seek to manage electricity more efficiently. Changing Infrastructure “We’ve got very old infrastructure, and it’s demonstrating more reliability needs as it continues to age,” Bob Gilligan , who leads GE Energy’s transmission and distribution unit, said in an interview Feb. 1. GE Transmission & Distribution gets about 55 percent of its revenue from North America and is expanding outside the U.S. The company also is targeting revenue abroad, including in China, Gilligan said. China is among growing economies boosting demand for U.S.- made products. Exports increased for an eighth straight month in December, according to Commerce Department data released last week.
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