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.