The financial crisis on Wall Street is beginning to trickle down to the Buffalo Niagara region's consumers and manufacturers.
A pair of new reports released Wednesday found that the region's manufacturers are growing more slowly and that local consumer confidence improved a bit during the summer from its gloomy spring levels.
Yet in both cases, researchers noted that the surveys did not reflect the full impact of the Wall Street financial crisis, which erupted in full force in mid-September.
"Hold on tight," said Douglas Lonnstrom, the founding director of the Siena Research Institute, which conducts the quarterly survey of consumers' willingness to buy across upstate New York. "Wall Street's collapse came just as the quarter ended."
Even so, local manufacturers reported a sharp slowdown in their growth rates during September, according to the National Association of Purchasing Management -- Buffalo.
The group's business activity index slowed to 54.8 during September, which still indicates that local manufacturers are expanding, but the pace of that growth was significantly slower than it was in August, when the index stood at 62.2.
Arthur Aramino, the chairman of the purchasing managers group's business survey committee, noted that it is normal for the index to drop during September, as seasonal jobs disappear and production slows, while orders for future work pick up.
"What is different this year is employment stayed about even and new orders decreased," Aramino said.
The local index also remained far stronger than a similar nationwide measure, which plunged during September to its lowest level since the aftermath of the Sept. 11 attacks.
The Institute for Supply Management's nationwide index dropped to 43.5, the lowest level since October 2001. The reading dropped from 49.9 in August, the largest one-month decline since January, 1984. A reading above 50 signals growth, while a reading below 50 indicates that the economy is shrinking.
Locally, employment growth slowed markedly during September, while new orders also grew more slowly than they did in August and the pace of hiring at local factories increased slightly.
At the same time, a separate report showed that consumer confidence in the Buffalo Niagara region improved slightly during the third quarter, but still remains close to its lowest levels in the nearly seven years that researchers at Siena College have conducted the survey.
Behind the more upbeat confidence levels was a sharply more upbeat outlook for the future, which rebounded from a nearly seven-year low. That helped offset a more depressed view of current conditions, which tumbled to their bleakest level since the survey began in late 2001.
Overall consumer confidence in the Buffalo Niagara region improved to 54.4, up 2.9 points from its record low set during the second quarter and the biggest quarterly jump of any of the eight metro areas included in the survey.
The third-quarter improvement in confidence levels left the Buffalo Niagara region squarely in the middle of the pack among New York metro areas, ranking fourth behind New York City, Rochester and Albany.
Mikhail Melnik, a Niagara University economist, said the fate of the region's economy is closely linked with the overall health of the U.S. economy, along with the strength of the U.S. dollar and the condition of the nearby southern Ontario economy.
"As the dollar reverses its trend [by strengthening] and the economy of Ontario, our direct foreign trade partner, inevitably slows, our regional growth will also decline," said Melnik, who is predicting a prolonged recession for the nation.