New York Manufacturing Sector Expands at Fastest Pace in Nearly Five Years

New York manufacturers say business activity jumped this month to its highest since late-2009, according to the Federal Reserve Bank of New York's Empire State Manufacturing Survey released Monday.

The Empire State's business conditions index rose to 27.5 in September from 14.7 in August. A reading above zero indicates expansion, while negative readings reflect contraction.

Economists surveyed by The Wall Street Journal had expected the latest index to rise to 16.0.

The Empire subindexes outside of employment showed broad improvement.

The shipments subindex rose to 27.08 from 24.59 in August, while new orders rose to 16.86 from 14.14.

Inventories contracted at a slower pace, at -7.61 this month after falling to -14.77 in August.

Labor indicators for the region, however, were less upbeat, with the index for the number of employees falling to 3.26 this month from 13.64 in August. The average workweek fell to 3.26 from 7.95.

The prices paid index receded a bit to 23.91 from 27.27. The prices received index jumped to 17.39 from 7.95, indicating a pickup in the pace of increases in selling price.

The generally rosy view on current conditions was paired with upbeat outlooks on business activity.

The general business conditions expectations index for the next six months held up at 46.72 after jumping to 46.76 last month. The employee expectations index dropped slipped to 14.13 from 22.73, but the average employee workweek expectations index improved to 5.43 from zero in August.

"Though both of these indexes were somewhat below their August levels, they remained high by historical standards," the report said.

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.