Manufacturing in Philadelphia region surged in February to highest level in 7 years

The Philadelphia region's manufacturing sector grew in February at its quickest pace in seven years, helping to fuel the nascent economic recovery and underscoring the contribution of factories to economic growth.

The Federal Reserve Bank of Philadelphia's general economic index climbed to 35.9, soaring past the median reading of 21 that a Bloomberg News survey of economists had predicted. The index hit its highest level since January 2004 on the strength of manufacturing in eastern Pennsylvania, southern New Jersey and Delaware.

Davis Semmens, an economist at Standard Chartered Bank, told Bloomberg he expects manufacturing growth to remain strong and that jobs will come to the sector as it expands. "We're still looking for activity to be strong definitely throughout the first half of the year," he said. "There is an increase in demand for labor, both in the number of employees and the average working week, which means people are going to have more money in their pockets."

The Philadelphia Fed said its new orders measure rose to 23.7 from 23.6 in January; the index hasn't hit that level since September 2004.