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Manufacturing in New York state falters in September, while a Philly business gauge soars

A worker uses a torch at the Watermark Designs manufacturing facility in Brooklyn, New York.
Victor J. Blue | Bloomberg | Getty Images

Manufacturing in New York state remained weak in September as factories reported fewer new orders, lower shipments and reduced staffing levels.

A separate report on the September Philadelphia Fed Business Index came in at a much-higher-than-expected 12.8, up from a 2.0 reading a month earlier. Economists had expected a flat reading for the month.

The Federal Reserve Bank of New York says that its Empire State index ticked up to a reading of minus 2, from minus 4.2 in August. Still, any reading below zero signals contraction.

Other measures fared much worse. A gauge of new orders dropped to minus 7.5 from 1, and a measure of shipments plummeted to minus 9.4 to 9. An employment index fell sharply to minus 14.3 from minus 1.

The report suggests manufacturers are still struggling with the dollar's sharp rise in the last 18 months and ongoing caution from businesses, which have been reluctant to invest in machinery and other large equipment.

CNBC contributed to this report.