Manufacturers in New York say business conditions this month are the best in more than a year, according to the Federal Reserve Bank of New York's Empire State Manufacturing Survey released Wednesday.
The Empire State's business conditions index increased to 12.51 in January from a revised 2.22 in December, originally reported as 0.98. This month's reading is the highest since May 2012.
As usually happens in January, the New York Fed revised the previous year's data to reflect new seasonal factors. A reading above 0 indicates expansion.
Economists surveyed by Dow Jones Newswires had expected the latest index to rise but only to 3.0.
"The January 2014 Empire State Manufacturing Survey indicates that business activity expanded for New York manufacturers and did so at a faster pace than in recent months," the report said.
The Empire subindexes are generally much improved.
The new orders index jumped to 10.98 in January from -1.69 in December, while the shipments index increased to 15.52 from 4.69.
Demand for labor also picked up. The employment index increased to 12.20 from zero in December, while the workweek index rose to 1.22 from -10.84.
With demand improving, New York state manufacturers tried to raise prices in the face of surging costs. The prices paid index jumped to 36.59 from 15.66 while the prices received index jumped to 13.41 from 3.61.
New York manufacturers were also upbeat about the next six months. The general business conditions expectations index for the next six months edged down to 37.51 from 38.96. But that overall level continued generally buoyant.
The employee expectations index increased sharply to 20.73 from 9.64.
The New York Fed survey is the first factory report released by regional Fed banks. Economists use the surveys as guideposts to forecast the health of the national industrial sector as captured in the monthly manufacturing report done by the Institute for Supply Management.