Backlog has been growing in the hard data so it is easy to believe the survey is likely correct. New orders continued its four month downward trend line which is a seeming contradiction – intuitively new orders and backlog should move in the same direction.
It is no surprise that the purchasing managers believe the service segment of the economy is expanding in January after the strong ADP data earlier this week.
Overall the NY Fed Empire State Manufacturing Survey does not correlate well with Industrial Production. Use the data from all surveys at your own risk.