The report from the New York Federal Reserve showed on Friday that manufacturing activity in the New York region expanded in March at a slower pace than in February.

According to the survey, NY Fed Empire State manufacturing index stood at 3.70 this month compared to an unrevised 8.80 in February. That was the lowest reading since May 2017.

Economists had expected the index to come in at 10.

Anything below zero signals contraction.

The new orders index dropped five points to 3.0, indicating that orders grew at a slower pace than last month, while the shipments index decreased three points to 7.7, the lowest reading in more than two years. At the same time, the index for number of employees surged ten points to 13.8, pointing to an increase in employment levels, though the average workweek index turned negative for the first time since 2016. With regard to inflation, the prices paid index rose seven points to 34.1, indicating a pickup in input price increases, while the prices received index decreased five points to 18.1, suggesting that selling price increases slowed.