New York Manufacturers Report Worst Conditions Since Great Recession

Manufacturers in New York State saw a sharp deterioration in business conditions in January, results of a key regional survey showed Friday. Results were well below what economists were predicting and marked the lowest levels in about 7 years.

The figures also showed a multi-year low in optimism.

The Federal Reserve Bank of New York said that its Empire State index came in at negative 19.37 for January. This was down sharply from the reading of negative 6.21 in December.

December's reading itself was revised down from the negative 4.6 that was originally reported last month.

Economists had expected January's figure to improve slightly to negative 4. Any reading below zero indicates contraction in the sector.

The Empire State index is compiled through a survey of manufacturers in New York State. It is meant to give a glimpse into the health of the state's factory sector and is one of the most closely watched of the various regional manufacturing surveys that come out each month.

January's reading marked the lowest level for the index since early 2009, the tail end of the Great Recession. It also marked the sixth consecutive month of contraction for the index.

The disappointing reading came as a decline in new orders accelerated during the month. The survey's new orders index dropped to negative 23.54 in January compared to negative 6.18 in December.

There was also a contraction in shipments. After a brief trip into positive territory in December, this sub-index dropped to negative 14.39 in January.

Optimism showed significant curtailment in January as well. An index for expectations 6 months down the road dropped to 9.51 in January compared to 35.65 in the previous month.

This was also its lowest level since 2009.