The New York Federal Reserve released its survey on Tuesday. The NY Fed Empire State manufacturing index rose to -16.64 in February from -19.37 in January, missing expectations for an increase to -10.00.
A reading above zero indicates expansion, while a reading below zero indicates contraction.
"The February 2016 Empire State Manufacturing Survey indicates that business activity continued to decline for New York manufacturers," the New York Federal Reserve said in its report.
The new orders index increased to -11.63 in February from -23.54 in January, while the shipments index climbed to -11.56 from -14.39.
The general business conditions expectations index for the next six months jumped to 14.48 in February from 9.51 in January.
The price-paid index dropped to 2.97 in February from 16.00 in January.
The index for the number of employees rose to -0.99 in February from -13.00 in January.