According to a survey by the Federal Reserve Bank of New York, the Empire State’s key production rate has fallen to its lowest level since the Great Recession – not counting the pandemic – as orders, deliveries and wages slump at factories.
The survey shows New York’s overall business conditions index fell to minus 31.8 in May, surpassing only minus 38.2 in early 2009 because the economy emerged from recession attributable to the mortgage crisis.
The index dropped to minus 80 at the peak of the pandemic, when lockdowns halted production.
The survey, a key metric for the state, is shipped to 200 New York production executives every month.
Any reading below zero is believed to indicate a contraction within the economy.
The New York Fed said on Monday that its barometer of manufacturing activity is incredibly volatile, making it difficult to interpret.
The General Business Conditions Index fell 42.6 points from the previous month, turning negative, the largest drop in a single month since the pandemic.
The disturbing May data followed April’s increase of 35.4 points, which raised the index to a positive reading of 10.8.
Economists polled by Reuters had expected the index to fall to just -3.75.
![According to a recent survey by the New York Fed, production in New York state fell significantly in May.](https://nypost.com/wp-content/uploads/sites/2/2023/05/NYPICHPDPICT000011135217.jpg?w=1024)
Orders fell probably the most since April 2020 – and the least since the start of the 12 months.
The index that measures shipments also fell by greater than 40 points, according to the survey.
The New York Fed’s recent orders index fell 53.1 points to -28.0 this month, while the delivery index fell 40.3 points to -16.4.
Almost half of the businesses that took part within the survey said that the economic situation within the country had deteriorated.
Goldman Sachs noted that the study “has been particularly volatile since 2022, fluctuating by at the very least 20 points greater than half the time.”
![The General Business Conditions Index fell 42.6 points to minus 31.8 in May, according to data released by the New York Fed.](https://nypost.com/wp-content/uploads/sites/2/2023/05/NYPICHPDPICT000011135200.png)
![The latest survey released by the Fed shows a decline in new orders and shipments.](https://nypost.com/wp-content/uploads/sites/2/2023/05/NYPICHPDPICT000011135204.png)
Nevertheless, higher rates of interest and the rotation of spending from goods to services hurt domestic productive activity.
Tighter credit conditions are also seen as an obstacle.
On Tuesday, the New York Fed will release a survey specializing in access to credit and credit conditions.
The Supply Management Institute’s measure of domestic manufacturing activity has shrunk six months in a row.
While manufacturing employment continued to fall from recent lows, it remained depressed.
![New York State is recovering slowly from the coronavirus pandemic.](https://nypost.com/wp-content/uploads/sites/2/2023/05/NYPICHPDPICT000011135205.jpg?w=1024)
Inflation on the factory gates continued to slow.
Businesses didn’t expect conditions to improve significantly over the following six months.
The survey’s measure of future business conditions rose to 9.8 from 6.6 in April.
According to the National Association of Manufacturers, manufacturers accounted for 4.01% of New York State’s total economic output in 2019, generating $71.06 billion and employing 400,000 people.
With postal wires