The New York Fed's Empire State general business conditions index came in at minus-5.22, from minus-6.16 the month before. Economists polled by Reuters had expected a reading of minus-6.70.

New orders rose to 3.08 from minus-8.97, the first positive reading for the forward-looking component index since June, while inventories were at minus-12.36 from minus-2.15.

Employment gauges showed a decline. The index for the number of employees fell to minus-14.61 from minus-1.08 and the average employee workweek index fell to minus-7.87 from minus-4.30.

The index of business conditions six months ahead came in at 12.88 in November from 19.42 in October.

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

The survey also asked how businesses were affected by Superstorm Sandy, which hit the U.S. Northeast in late October.

In New York City, 100 percent of firms reported some reduction in activity due to the storm, with 70 percent citing loss of power and communication as a major factor.

However, only 21 percent of firms in upstate New York reported a loss of activity.