A steep plunge in both new orders and shipments sent manufacturing activity in New York state tumbling down to its lowest level since 2009. This was the revelation showed by a survey conducted by the New York Federal Reserve.

Reuters reports that the Empire State Manufacturing Index has shrunk to -14.92, a slide of 11 points down from the 3.86 rating it posted just a month before. The deep slide contradicts forecasts that the Index would appreciate to a 5.0 level for August. For context, any rating below zero (0) indicates a contraction in the market, while a rating above zero indicates market expansion. The survey of  manufacturing market conditions in New York is an early indicator of how the overall U.S. factory conditions will play out.

New orders stayed in the red for the third month in a row; it hovered at -15.70, down from July's -3.50 rating. Shipment activity likewise declined from a July rating of 7.88 to the August level of -13.79.

The survey, however, forecasts better future business conditions for the state. Ratings for New York now stand at 33.64 from last July's 27.04.

An article from News1130 meanwhile points out several factors likely to have caused Monday's severe drop in manufacturing activity. Aside from flagging economies in Europe and China that have cut into exports, a rise in the dollar's value in the past year may have triggered foreign markets to ease up on exporting from the U.S. Cheaper oil prices may have also knocked down the demand for steel pipe and other drilling-related equipment.

Still, some analysts are skeptical of the figures presented by the survey, considering that on the national level, data is showing that manufacturing is on an uptick buoyed by stronger domestic demand. Jesse Hurwitz at Barclays Capital noted, "Given the limited manufacturing base in the New York area, we take this morning's negative surprise with a grain of salt."