Fed finds service, factory execs optimistic, but reluctant to hire
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Service businesses in the metropolitan area and manufacturers throughout New York State are predicting a sales pickup in the next six months, according to surveys of executives released Tuesday.
However, few of the executives are expecting to hire large numbers of employees or spend significant sums on equipment and buildings.
The Federal Reserve Bank of New York said Tuesday the typical factory in the state is forecasting a 4 percent sales gain for the entire year compared with 2013.
That would be a big jump from the 1.5 percent increase that the typical plant saw in the first six months, year over year.
The difference in outlook was less dramatic with retailers and other service companies.
The typical service business reported a 3 percent gain in sales during the first six months of this year compared with the same time a year ago. They are forecasting a 4 percent sales rise for all of 2014 compared with 2013.
"In assessing sales prospects for the full year . . . businesses were more optimistic," the Fed said in a statement. It also noted that in similar surveys last year, manufacturers were more bullish about full-year sales for 2013 compared with 2012 while service-sector companies were pessimistic.
The responses came from polls conducted earlier this month by the bank of about 100 factories in the state and about 100 service businesses in the metro area, including retailers and technology firms.
Despite the optimism about sales growth in the second half of this year, 26 percent of manufacturers and 32 percent of service companies said they had recently reduced their sales forecasts.
Also, few are planning to add employees between July 1 and Dec. 31, or invest in construction and machinery.
The bank said, "Year-to-date, actual hiring and capital spending have both been slightly less than planned, on balance."