he pace of manufacturing growth in the U.S. mid-Atlantic region slowed slightly in October, but firms' optimism about the future hit a 10-year high, a survey showed on Thursday.
The Philadelphia Federal Reserve Bank said its business activity index slipped to 19.8 in October from 22.3 in September. The October figure was still well above economists' expectations for a reading of 15.0.
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The index has now been positive for five straight months. Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
The strength of the reading surprised analysts, who noted that a recent U.S. federal government shutdown because of a budget impasse in Congress could still affect future data.
"This is kind of surprising given what's been happening in Washington," said Scott Brown, chief economist with Raymond James in St. Petersburg, Florida. "I want to see another month of this. The key economic story was that it was going to be stronger were it not for the government."
The new orders index increased to 27.5, its highest reading since March 2011, from 21.2, while employment rose to 15.4, its highest reading since May 2011, from 10.3. Prices paid fell to 21.7 from 25.3.
The survey showed respondents were optimistic about the future, with the six-month business conditions index at 60.8, the highest level since September 2003, from 58.2 in September.
The survey is one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.