12:28 PM EDT, 03/15/2024 (MT Newswires) -- New York manufacturing activity fell more than expected into deeper contraction territory this month amid a sharp drop in orders, while optimism continued to be subdued, the Federal Reserve Bank of New York said on Friday.

The Empire State Manufacturing Survey's general business conditions index tumbled to negative 20.9 in March from negative 2.4 in February. The consensus was for a smaller decline to a negative 7 print in a survey compiled by Bloomberg.

"Manufacturing activity fell significantly in New York State in March, with a decline in new orders pointing to softening demand," said Richard Deitz, economic research adviser at the New York Fed. "Labor market conditions remained weak as both employment and hours worked decreased."

The new orders index dropped to negative 17.2 from negative 6.3, while the shipments gauge swung to negative 6.9 from 2.8, according to the regional Fed's survey that collected responses from March 4 to March 11.

The prices paid index dipped 4.3 points to 28.7, while the price received index edged up slightly to 17.8. The component charting number of employees fell 6.9 points to negative 7.1.

Six months out, the index for general business conditions ticked up marginally to 21.6. The index measuring future new orders gained a point to 29.3, while the shipments component rose 8.4 points to 33.7.

"Firms expect conditions to improve over the next six months, though optimism continued to be subdued," the Fed branch wrote.

Expectations about price paid six months from now moved half a point higher to 35.6 while the index for prices received climbed by 9.3 points to 32.7