If you can knit or crochet, you’ve got it made. You can make a baby’s receiving blanket using just one skein of yarn. About $3. With that same skein of yarn, you can make about 3 sets of booties and baby hats. That’s 3 baby shower gifts for about $1 each. Or make just the booties for less. If you can afford it, make one set of booties according to the pattern and one set using a larger needle so they are a larger size for when the baby grows.
There are free patterns online at the Lion Brand website.
If you can embroider or do other needlework (like cross-stitch), customize a pillowcase, baby towel, or other item.
There are other gifts that don’t require needlework skills. Buy a t-shirt at a craft store and use fabric pens or iron-on appliquès to decorate it.
Make a coupon book for free babysitting, taking the carpool one day, doing 2 loads of laundry, watching the baby for an hour so mom can take a bath, etc.