New York State’s manufacturers are faring worse than predicted and may continue to suffer into next year, according to data released yesterday by the New York Federal Reserve.

The monthly Empire State Manufacturing Survey, which measures general business conditions, plummeted 17 points in November, to 10.3, the lowest level since spring. The index fell well below its six-month average of 22.11, a far steeper drop than analysts had expected.

“Generally we look at the New York Fed as a leading indicator of the economy,” the chief economist for Wachovia Securities, John Silvia, said. “The number was disappointing and it does suggest that there will be slow growth in the first half of 2008.”

The Empire State index has been stronger than other states’ manufacturing indices in recent months, and its decline could signal a wider economic slowdown. Yesterday’s report showed weakness in nearly every manufacturing component: orders, shipments, inventories, and unfilled orders.

Because manufacturing plays such a large part in America’s economy, the Empire State Manufacturing report often has a strong influence on the market. Despite this grim news, some economists are not worried: The team at Wrightson ICAP re-calibrated the survey’s findings, giving more weight to certain manufacturing components such as new orders and production. Its weighted version fell only two points, to 55.9, which is much closer to the average for the index year-to-date.

“Increases in the employment and delivery time indexes partially offset declines in orders and shipments,” the firm wrote in a note. “The factory sector of the New York regional economy is still growing at a healthy pace.”

In other economic news, America’s current account deficit fell to $178.5 billion, or 5.1% of the country’s GDP, in the third quarter of 2007. The account deficit tracks how much debt America has incurred with foreign economies as a result of trade imbalances. Reducing the amount of money America owes to foreign lenders allows the government to see lower interest payments on such debt, freeing up capital.

“On the whole, the change is good,” a professor of finance at Northeastern University in Boston, Wesley Marple, said.

American demand for imported goods has slowed in recent months, and the declining value of the dollar against other currencies has made American goods appear cheaper to overseas buyers, many of whom are experiencing rapid economic growth.

The last time America’s trade gap was this small was in 2004.

Meanwhile, the net foreign buying of long-maturity U.S. securities jumped to $101.5 billion in October, according to the Treasury Department. In September, foreign investors sold $5.2 billion.

Mr. Marple said the increase could signal that foreign investors view the American economy as a place of financial refuge and long-term stability. “They may be thinking right now that the U.S. economy will continue to service its debt, even though the dollar value of that debt may be lower,” he said.