NEW ORLEANS (AP) -- General cargo handled through the Port of New Orleans dropped by more than 26 percent during the first four months of 2008, following a year that marked a 17-year low point for the port.

General cargo, which includes all goods except bulk items that are loaded directly into ship holes, totaled 2 million tons during the latest period -- down from 2.7 million tons for the first four months of 2007.

A sluggish economy and a national decline in steel exports have contributed to the drop, port officials said. Steel movements at the port dropped nearly 44 percent during the first four months of the year.

Container cargo shielded the port from a bigger hit.

Last year, the port handled 251,000 TEUs, a term that describes the number of containers into the equivalent of 20-foot-long units. By that measure, container shipments have risen 42 percent since 2006 -- the year after Hurricane Katrina hit the region.

But in 2004, the last full year before Katrina, the port handled 258,000 TEUs.

Between January and April, the port saw about 80,500 TEUs, down less than 1 percent compared with the same period last year.

On Thursday, the port's governing board approved a budget with a projected $38.8 million in operating revenue for the next fiscal year, which begins Tuesday. That would represent a $2.2 million increase over 2007-08.

"We are projecting a little bit more container business, and an increase in fees helped," said Patrick Gallwey, the port's chief operating officer.

Trying to keep up with stiffening competition, the port in March unveiled a plan to spend more than $1 billion by 2020 to boost its container cargo capacity, expand cruise facilities and bounce back fully from Hurricane Katrina.