Manufacturing activity in New York State has continued to expand in the month of February, according to a report released by the Federal Reserve Bank of New York on Wednesday, with the index of activity in the sector rising to its highest level in more than a year.
The New York Fed said its general business conditions index rose to 19.5 in February from 13.5 in January, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to edge up to a reading of 14.8.
With the bigger than expected increase, the index rose to its highest level since coming in at a reading of 20.3 in June of 2010.
The improvement by the headline index came despite modest decreases by a number of the other key indexes measured by the New York Fed.
While the shipments index edged up to 22.8 in February from 21.7 in January, the new orders index fell to 9.7 from 13.7 and the inventories index dropped to a negative 4.7 from a positive 6.6.
The report also showed that the number of employees index slipped to 11.8 in February from 12.1 in January, although it continued to point to job growth in the sector.
Paul Dales, senior U.S. economist at Capital Economics, said, "A weighted average of these indices, which replicates the method used to calculate the ISM index, declined to 8.1 from 10.2."
"Even so, this index is consistent with the ISM manufacturing index rising above 55 in February, from 54.1 in January," he added. "Moreover, it suggests that U.S. manufacturers are still benefiting from the recent turnaround in the global economy and strengthening in domestic demand."
On the inflation front, the New York Fed said its prices paid index fell to 25.9 in February from 26.4 in January, while the prices received index tumbled to 15.3 from 23.1.
The report also showed that the future general business conditions index fell to 50.4 in February from 54.9 in the previous month.
Despite the decrease, the New York Fed noted that the index remains at fairly high levels, signaling considerable optimism about the future.
Thursday morning, the Philadelphia Federal Reserve is scheduled to release its own report on regional manufacturing activity. The Philly Fed Index is expected to climb to 9.5 in February from 7.3 in January.
by RTT Staff Writer
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