Empire State Manufacturing Activity Remains Positive

Factory activity across New York state remained in positive territory, according to a report from the Federal Reserve on Tuesday, and firms remained optimistic about future conditions.

The Federal Reserve Bank of New York's general business conditions index came in at 6.5 this month from a reading of 7.6 in December. Results below zero represent a contraction. It was the third consecutive month of a positive reading.

American factory activity has been pressured by weaker global demand, a strong dollar that makes U.S. goods more expensive abroad and an energy rout that has led oil-sector firms to slash budgets. But shipments and new orders remained positive in the latest month, and inventories edged higher for the first time in more than a year. Still, labor market conditions for manufacturers remained weak.

Indexes for the six-month outlook signaled that firms are highly optimistic about their economic situation, with the index for future business conditions unchanged at a reading of 49.7, matching last month's multiyear high, according to the report. Firms expect strong growth in employment and in hours added.

Write to Joshua Jamerson at joshua.jamerson@wsj.com