Manufacturers in the Philadelphia region indicated that business took a positive turn in March, according to the Federal Reserve Bank of Philadelphia's March Business Outlook Survey.
Indicators for general activity and new orders increased notably, following two months of negative data.
Indicators for shipments and employment remained positive and improved slightly in March.
"Changes in the survey's broad indicators of future activity were mixed but continued to reflect general optimism about growth over the next six months," the Philadelphia Federal Reserve said in a news release.
The diffusion index of current activity – the survey's broadest measure of manufacturing conditions – jumped from a reading of minus 12.5 in February to 2.0 in March.
Meanwhile, the demand for manufactured goods also showed improvement, as the new-orders index increased from a reading of negative 7.8 in February to 0.5 in March, its first positive reading in three months.
The shipments index edged higher to 3.5.
Labor-market conditions showed continued signs of stability, but little overall growth.
The employment index increased from 0.9 in February to 2.7 this month, its second consecutive positive reading. The percentage of firms reporting employment increases (17 percent) narrowly exceeded the percentage reporting decreases (14 percent).
For the third consecutive month, the prices-received index was slightly negative, suggesting little price pressures.
The prices-paid index hit its lowest reading in nine months. Seventeen percent of firms reported paying higher prices for inputs, compared with 13 percent last month.
The survey's future indicators suggest that firms expect growth in business over the next six months.
Capital Spending Sluggish
Responding to a special question about their capital-spending expectations, over 39 percent of manufacturers indicated that total capital spending would increase this year compared with 2012.
Another 32 percent indicated that capital spending would decrease.
With the exception of non-computer equipment, most categories of planned capital spending were being scaled back this year.
Among firms that did not plan to increase capital spending, the most cited reasons were low sales growth, low capacity utilization and limited need to replace capital and technology equipment.