Drop in business conditions 'largest on record,' NY Fed's poll finds
The Federal Reserve Bank of New York; the new poll is from March 2-10. Credit: Craig Ruttle
Manufacturers in New York State turned pessimistic about business conditions this month as the coronavirus spread, sending a key economic indicator to a record low, officials said.
The Federal Reserve Bank of New York said Monday its index of how factory executives view current general business conditions fell in March to its lowest level since 2009, the last time the U.S. economy was in recession.
The monthly decline was the steepest on record, the bank said. The index began in 2001 and is part of the Empire State Manufacturing Survey, which collects responses from about 125 factories including some on Long Island.
The new responses are from March 2-10 and the first confirmed case of the coronavirus in New York was announced on March 1 by Gov. Andrew M. Cuomo.
A New York Fed spokesman declined to comment Monday on whether the poll results were impacted by the coronavirus. He cited the bank’s policy of not making statements to the media immediately before or after the Federal Reserve changes interest rates, which occurred on Sunday. The New York Fed is one of 12 banks that make up the Federal Reserve.
The Empire survey is among dozens of indicators used by the Fed to montior the health of the U.S. economy.
This month, the survey's general business conditions index fell 34 points, to -21.5. The index stood at 12.9 points in February. An index reading of zero points indicates a neutral outlook.
“Manufacturing firms in New York State reported that business activity declined,” the bank said, adding the drop in the business conditions index is “the largest on record. ... Forty-two percent reported that conditions had worsened” since last month, with the number of new orders down.
“Firms no longer expect general business conditions to be better over the next six months,” the New York Fed said. “The index for future business conditions declined 22 points to 1.2, its lowest level since 2009."
James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.
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