02:46 PM EST, 01/15/2025 (MT Newswires) -- New York manufacturing activity posted a surprise drop into contraction territory in January as orders and shipments plunged, the Federal Reserve Bank of New York said Wednesday.

The Empire State Manufacturing Survey's general business conditions index fell to minus 12.6 this month from 2.1 in December. The consensus was for a month-to-month improvement to 3, according to a survey compiled by Bloomberg.

"After holding steady last month, manufacturing activity declined in New York State in January," New York Fed Economic Research Adviser Richard Deitz said.

New orders slid 12.9 points to minus 8.6, according to the Fed branch. Shipments declined to minus 1.7 from December's reading of 9.1. The component measuring number of employees rebounded to 1.2 from minus 6.6, the survey showed.

The raw material cost index advanced eight points to 29.1, while the selling prices measure increased 5.1 points to 9.3, according to the report. "Price increases, while subdued, picked up," Deitz said.

Six months out, the index for general business conditions climbed by 9.8 points to 36.7 this month, the New York Fed said. The future new orders index rose to 34.2 from 28.3, while the shipments gauge declined, the survey showed.

"Firms grew more optimistic that conditions would improve in the months ahead," Kan said.

The outlook for employment growth edged down 0.3 point to 13.8. Firms indicated that they expect price growth to accelerate over the next six months.