February 2010

NEW YORK CITY REPORT ON BUSINESS:
Weather Can't Keep A Good Thing Down
(Released February 26, 2010)

New York City business activity is strengthening and broadening, according to the survey taken by the Institute for Supply Management-New York (ISM-NY). The Current Business Conditions index rose to 77.0 in February, the best level in more than three years, from 72.6 in January.

Future optimism decreased from white hot to red hot. The Six-Month Outlook index came in at 81.1 in February following the January surge to 97.0.

Gains in jobs and purchasing volumes are being sustained. The Employment index expanded for the fourth consecutive month, coming in at 53.4 in February from 54.2 in January. The Quantity of Purchases index expanded in three of the last four months, advancing to 60.3, the highest level since June 2007, after 53.1 in January.

Downward pressure on input costs is abating. The Prices Paid index rose to 46.6 in February, a 15-month high, from 38.5 in January.

Weather was cited much more frequently as a business impediment in February, even more so than working capital shortages, which declined for a sixth straight month as financial conditions continued to improve.

Business Impediments:

	Feb		Jan		Dec
Skilled labor shortage:	7%		8%		8%
Unskilled labor shortage	0%		2%		0%
Working capital shortage:	17%		21%		22%
Raw material shortage:	14%		0%		3%
Security concerns:	7%		6%		8%
Abnormal weather:	21%		6%		11%
"Other" difficulties:	17%		10%		16%
No difficulties:	28%		29%		24%

* * *

February's Question of the Month: Are your 2010 capital spending plans higher, steady, or lower compared to 2009? There has been a relative improvement this year over last year, however, the percentage of firms planning lower spending still outnumber the ones planning higher spending by a 2 to 1 margin.

Higher: 19% / 6% / 28% (2010 / 2009 / 2008)
Steady: 44% / 23% / 50%
Lower: 37% / 71% / 22%

The ISM-New York REPORT ON BUSINESS is a monthly publication of ISM-New York. Permission is granted to duplicate, republish or quote in whole or in part with credit. For technical questions on the survey, please contact Jonathan Basile via phone: 212-538-1436 or email: jonathan.basile@credit-suisse.com

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