In the survey, 43% of respondents indicated that conditions had improved, while 19% reported that conditions had deteriorated.
Further, two key components of the index fell in November. The new orders index fell to 16.7 from 30.8, and the shipments index declined to 13.0 from 35.1.

Also, survey respondents said they faced less pricing pressure in November; input prices continued to rise and selling prices continued to fall, but the pace of price changes eased. The prices paid index posted its first decline in several months, falling 9 points to 10.5 -- a sign that the pace of price increases was slower in November than in October.

Cash holdings seen improving

In addition, respondents were also asked a series of supplemental questions in November about cash holdings and debt financing. More than 40% of manufacturers expected cash holdings to increase over the next year, while 24% expected them to decline -- in sharp contrast to results from an identical survey conducted a year ago, the New York Fed said, when more manufacturers had expected cash holdings to decline than to rise.

Investors should monitor the the Empire State index and survey because it typically provides an early-read on larger manufacturing surveys released later, such as the Institute for Supply Management's manufacturing survey.

Economic Analysis

This was a "glass half full" November Empire State Manufacturing report. The survey provided more evidence of an ongoing economic expansion, but the index declined, indicating that growth probably has slowed. Still, a one-month dip in the Empire State index during a longer-term expansion is not unusual; provided the uptrend resumes in subsequent months, the recovery narrative will remain in place. Further, manufacturers' outlook regarding their future cash position also was encouraging: It indicates that businesses believe their balance sheets will strengthen – something that will aid operational expansion as demand increases.