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Wednesday, October 15, 2008 - 11:02 AM EDT  |  Modified: Wednesday, October 15, 2008 - 2:28 PM
NY manufacturing index at record low

The Business Review (Albany)

Manufacturing activity in New York has dropped to its lowest point on record, the New York Federal Reserve Bank’s Buffalo branch reported Wednesday.

The bank’s monthly manufacturing index settled at negative 24.6 in October, down from negative 7.4 in September.

The report’s index measuring new orders also fell to a record low, while the indexes for shipments, unfilled orders, and inventories all declined sharply. The employment index was negative.

A value of zero indicates no gain or decrease in activity from the previous month, and this month’s negative results indicate a faster pace of decline from September.

“It’s the weakest report we have on record,” said Richard Deitz, an economist at the bank who handles the survey.

The bank surveys a pool of 200 manufacturing executives from around the state. Data was first collected in June 2001.

Additionally, the future general business conditions index dropped 19 points to 24.2, with 47 percent of respondents expecting conditions to improve over the next six months and 23 percent expecting conditions to worsen.

Despite the nation’s squeezed credit markets, most manufacturing companies reported little change in their own borrowing needs. A third said the cost of borrowing money had increased from three months ago.

About 22 percent of respondents said their need for credit had increased over the past year, while 31 percent said their need had decreased.

Also, 25 percent of executives who responded said they’ve seen banks and other lenders tighten eligibility standards for credit. Manufacturers said they most often delayed investments in new space or equipment and delayed payments to vendors as a result of credit tightening.