The pace of growth in New York state's manufacturing sector unexpectedly slowed this month but firms' outlook brightened, a report from the New York Federal Reserve showed on Monday.
The New York Fed's "Empire State" general business conditions index slipped to 6.29 from 8.24 in August, shy of economists' forecast of 9.20.
The New York Fed described the result as reflecting "modest expansion" in the sector. A reading above zero indicates expansion.
The new orders index rose to 2.35 from 0.27 and shipments surged to 16.43, the highest level in more than a year, from 1.47.
Labor market conditions were a bit softer but "generally steady" with the index for the number of employees slipping to 7.53 from 10.84 in August. The average employee workweek index fell to 1.08 from 4.82.
Firms expected improvement in the months ahead, though. The index of six-month business conditions rose to 40.64 from 37.39.
The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.