Manufacturing production in New York State fell to yet another record low in March, extending its slump as gauges tracking new orders and investments deteriorated, according to a survey released on Monday.
The New York Federal Reserve said its Empire State factory index fell to minus 38.23 in March -- the lowest in the history of the index, which dates back to July 2001. It was also down from February's minus 34.65.
A weak Empire State release, suggesting a faster pace of contraction in March than in February, said Ian Lyngen, interest rate strategist at RBS Greenwich, in a research note.
Economists had expected a reading of minus 32.0, according to the median of their 50 forecasts, which ranged from minus 40.0 to negative 25.0.
On Wall Street, stock index futures pared their gains. U.S. Government bonds, which generally benefit from signs of economic weakness, trimmed their losses.
One silver lining in the report was that the six-months-ahead expectations gauge of general business conditions improved to positive 3.14 from February's minus 6.56.
However, this was coupled with more signs that tight credit conditions were hampering business.
The Empire State Manufacturing Survey indicates that conditions for New York manufacturers deteriorated significantly in March, the report said.
Respondents did report fairly widespread tightening in credit standards and borrowing costs, the report added. These changes have in turn affected both capital spending plans and hiring plans for a greater proportion of firms than in last autumn's survey.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.
The report said its new orders and shipments indexes also dropped sharply to record lows and investment was also suffering, with capital spending and technology spending gauges also falling to their weakest on record.
Since January 2008, the main index has had only one month in positive territory, which came in April last year and even so was barely above zero at 0.81.
The Institute for Supply Management said earlier this month that in February, national factory activity contracted for the 13th consecutive month as businesses struggled to work off an inventory glut arising from the sharp economic deterioration.
(Reporting by Burton Frierson; Editing by Kenneth Barry)