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N.Y. factory index declines
Capital Region firms appear to be stable
Saturday, February 16, 2008
By James Schlett (Contact)
Gazette Reporter

STS Steel welder Dan Krajewski fabricates supports for the restoration of platforms and canopies for Metro North rail stations on Friday. A key index shows difficulties in the state's manufacturing sector, but many Capital Region businesses say they have not been affected by the downturn.
Economic worries threw a wrench in New York’s manufacturing sector, sending business conditions to their lowest levels in almost five years, according to a report released Friday by the Federal Reserve Bank’s Buffalo branch.
The Fed’s monthly Empire State Manufacturing Survey showed a 21-point drop in its general business conditions index to -11.7 in February. That decline marked the first time the index has slipped below zero since May 2005, and it was the worst reading since April 2003.
Unlike the previous instances when the index fell below zero and quickly rebounded during periods of economic expansion, February’s drop comes as the nation teeters on recession.
The drops in 2003 and 2005 were spurred more by inventory corrections than the type of economic downturn manufacturers statewide are now facing. And that distinction calls into question how quickly the sector will recover, said Fed economist Jason Bram.
“This one just looks like a steeper drop,” Bram said.
New orders and shipments fell to their lowest levels since October 2001, declining to -11.88 and 4.86, respectively. At 4.19, the future employment index also fell to its lowest level since October 2001.
February’s order, shipment and employment index plunges sent New York’s manufacturing sector back to where it stood near the end of the nation’s last recession. The 2001 recession started in March and lasted eight months.
Technically, a recession is when the gross domestic product exhibits two consecutive quarters of negative growth. The nation posted a 0.6 percent GDP increase for the fourth quarter of 2007. Global Insight, a Lexington, Mass. economic research firm, recently declared that the nation has entered into a recession.
“The fact is New York does worse in a recession [than the nation], and this is an example of that,” said David Shaffer, a spokesman for the Business Council of New York State, an Albany trade organization.
The report was not broken down into regions, but many Capital Region manufacturers said they have not been hit by the downturn plaguing companies elsewhere in New York. They noted how the region — buffered by its strong state government and higher education employment base — tends to be slow in feeling recession pains.
“We’re obviously concerned, but at this point it has not impacted us greatly,” said Thomas O’Connor, the chairman and chief executive officer of Mohawk Fine Papers in Cohoes.
O’Connor said his paper mill has not seen any downturn, but “Business can always be more robust.” Mohawk has not halted hiring or supply buying, but it has called for an across-the-board 5 percent cut in company expenses. Mohawk employs 400.
At Schenectady baggage manufacturer Tough Traveler, President Nancy Gold said domestic sales are flat though international sales are up slightly. She did not know whether the international business — especially among Japanese customers — is stronger now because of the weaker dollar that makes U.S. exports more attractive.
In the Fed survey, 37 percent of manufacturers said they had been adversely affected by the weaker dollar and 18 percent reported positive affects from it.
“Business is actually pretty good. There seems to be things to do,” said Scott Stevens, the president of Dimension Fabricators in Schenectady.
Stevens said his company, which makes steel reinforcing bars for foundation building foundations, has a strong backlog of orders. At STS Steel, another Schenectady steel fabricator that employs 65, President Jim Stori said his company is yet to feel the impacts of a recession.
STS workers are busy making steel beams and columns for expansion projects at Hudson Valley train stations plus the College of Nanoscale Science and Engineering and St. Peter’s Hospital in Albany.
Even small-scale manufacturers such as the Newberry Knitting Co. in Rotterdam maintained an upbeat outlook. Its annual sales grew 10 percent in 2007 and year-to-date sales are up 20 percent compared to a year earlier.
Newberry President Art Newberry said winter weather that is much colder than a year ago might have given the glove and hat maker a boost. The company employs seven.
“For us we’re very fortunate. We haven’t felt that” economic downturn, said CEO Walter Borisenok the president and CEO of Fortitech in Schenectady.
Global demand for nutrient-fortified foods and beverages has created a boom for Fortitech, which employs 400 worldwide and 165 in Schenectady.
Fortitech makes nutrient premixes and expects to end 2008 with up to $150 million in revenues, compared to $130 million in 2007. Borisenok said he does not expect a recession to temper demand for Fortitech’s products.
“Food is one of the last things to get hit. People gotta eat,” he said.

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Manufacturers in
N.Y. post worst
outlook on record
    BUFFALO — Economic conditions are deteriorating further for New York manufacturers, who this month reported their worst business outlook on record, according to survey results released Monday by the Federal Reserve Bank’s Buffalo branch.
    Continuing the free fall that started in February, the state manufacturing sector’s general business conditions index fell 10.5 points to -22.2. Last month’s plunge followed a 21-point dive in February and broke November 2001’s record low of -19.6, according to the monthly Empire State Manufacturing Survey.
    The Fed survey adds to the mounting evidence pointing toward what many economists believe to be a recession. Manufacturers held a gloomy outlook even though new orders index rose 7.19 points to - 4.69, compared to February. Fed Senior Economist Richard Deitz said manufacturers appear to be painting a darker picture for their sector than for their own businesses.
    The Fed started surveying New York manufacturers in July 2001.

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Fact Check: Hillary Clinton reminded of jobs promised but not delivered in upstate New York
Associated Press
Last update: February 28, 2008 - 4:12 PM



BUFFALO, N.Y. - She's reminded of it all the time around here, so Sen. Hillary Rodham Clinton couldn't have been surprised when her failed 2000 campaign promise to bring 200,000 jobs to economically desperate upstate New York became part of the latest presidential debate.

In her first term in the Senate, the region saw a net loss of 26,500 jobs, according to an analysis of U.S. Bureau of Labor statistics by the Business Council of New York State.

"All one has to do is listen to talk radio to know that's on a lot of people's minds," said Kevin Hardwick, a political science professor at Canisius College in Buffalo.

Clinton recently called the promise "a little exuberant." During Tuesday's debate with Barack Obama, the New York senator said she was figuring Al Gore would be in the White House.

"When I made the pledge, I was counting on having a Democratic White House, a Democratic president, who shared my values about what we needed to do to make the economy work for everyone and to create shared prosperity," she said.

"And as you know, despite the difficulties of the Bush administration and a Republican Congress for six years of my first term, I have worked very hard to create jobs, but obviously as president I will have a lot more tools at my disposal," she said.

The failed 200,000 number got its share of attention during Clinton's 2006 bid for re-election, but it hardly hurt her. She easily beat back a challenge from former Yonkers Mayor John Spencer.

THE SPIN:

By saying her job-creation efforts for upstate were stymied in the Senate by a Republican administration and policies, Clinton hopes to deflect doubt about her ability to fulfill a new pledge as president to create 5 million new jobs over 10 years.

THE FACTS:

From 1990 to 2000, New York state jobs grew at a rate of about 13 percent, while the nation saw a 20 percent jump. If the upstate region, with 3.1 million jobs in 2000, had broken out of its sluggish 5 percent growth to be on par with the entire state or the nation, that could have meant a couple hundred thousand jobs.

But upstate New York had not grown at the overall state or national pace for decades — and there was no imminent change on the horizon. As they had before Clinton became senator, manufacturing jobs continued to disappear upstate after the election — from Rochester-based Kodak, flatware-maker Oneida Ltd., Carrier Corp. in Syracuse, western New York's auto and auto parts manufacturers, and others.

Two months after arriving in the Senate, Clinton introduced her first legislation, a package of seven bills designed to spur job growth through tax incentives, entrepreneurial incubators and job training programs.

In late 2003, she announced her participation in a New Jobs for New York initiative, a private, not-for-profit corporation formed by investment banker Roger Altman, who served as deputy treasury secretary in her husband's administration. The goal was to stimulate economic development upstate by matching Wall Street investors with businesses in depressed areas.