Empire State Manufacturing Remains in Contraction

Manufacturing conditions across New York state remained weak in February, the most recent indication that forces including a strong dollar, a flagging oil industry and softening global demand are weighing on manufacturing activity.

The Empire State's business conditions index edged up to -16.6 after tumbling to -19.4 last month, a reading that marked the fastest pace of deterioration since the recession. Economists surveyed by The Wall Street Journal expected a more substantial bounce to -10.0.

February's decline represented the seventh straight month of contraction for New York production. The decline came as new orders and shipments remained under pressure. A sub index of new orders came in at -11.63 while a measure of shipments was at -11.56. Both gauges showed improvement from January.

Hiring by the state's manufacturers also improved from recent levels, but an index measuring employment held below the flat line at -0.99. That is as the number of hours worked also improved but remained soft.

The New York area report is the first of a slew of manufacturing surveys conducted by regional Fed banks, looked to by economists and traders for clues ahead of a closely watched gauge of national manufacturing. The Institute for Supply Management's index, next due on March 1, has also languished in recent months.

Write to Lisa Beilfuss at lisa.beilfuss@wsj.com