NEW YORK (AP) _ If you thought New York was in decline, you may have clucked over the news from Fortune magazine last week that New York state now has fewer Fortune 500 industrial headquarters than California and Illinois.

That's a bit misleading, New York officials are quick to point out. First, New York City remains No. 1 in cities with Fortune 500 industrial headquarters, at 29. Los Angeles is a distant No. 11 with 7 headquarters.

Second, the Fortune list for New York state was trimmed because the magazine changed the way it defined or examined companies.

Some were reclassified as service businesses, for example, putting them into the ranks of a separate Fortune Service 500 listing, where New York state dominates. Others were deleted from the 500 industrials list because they were no longer publicly owned or have merged with other companies based elsewhere.

Susan Glass, spokeswoman for the New York State Urban Development Corp., said the results of Fortune's rankings aren't the result of ''anything we're doing. We still have more Fortune corporations than anywhere else, and we're not wringing our hands...or resting on our laurels.''