US Economy

Factory activity unexpectedly contracts in February: Philly Fed

Factory activity in the mid-Atlantic region unexpectedly contracted in February as new orders plunged, according to a government survey released Thursday.

The Philadelphia Federal Reserve Bank said its business activity index tumbled to minus 6.3, from plus 9.4 in January. That was far below economists' expectations for 8.0, according to a Reuters poll.

An employee assembles a Makerbot 3D Printer at the company's factory in Brooklyn, New York.
Victor J. Blue | Bloomberg | Getty Images

A reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

New orders fell to minus 5.2 from 5.1. Growth in the employment component decelerated, with the index down to 4.8 from 10.0.

(Read more: Jobless claims dip modestly; prices remain dormant)

But survey respondents' view on the coming months improved, with the gauge of business conditions for the next six months rising to 40.2 from 34.4.

The survey is seen as 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.

—By Reuters.