The Philadelphia Federal Reserve Bank released its manufacturing index on Thursday. The index dropped to 6.3 in January from 24.5 in December. That was the lowest level since February 2014.

Analysts had expected the index to decline to 20.3.

A reading above zero indicates expansion.

The survey said that general activity and new orders are expected to grow moderately.

"Price pressures were reduced and that lower energy prices are having net beneficial effects", the survey said.

The survey's respondents expect weaker labour market conditions in January.

"Firms remain optimistic about increases in overall business and employment over the next six months", the survey showed.