Manufacturing in the New York region expanded more than forecast to the highest level in seven months in December, as measures of employment and new orders improved.

The Federal Reserve Bank of New York’s general economic index rose to 9.5, from 0.6 in November. Economists projected the gauge would rise to 3, based on the median of 55 forecasts in a Bloomberg News survey.

Readings higher than zero signal expansion among companies in the so-called Empire State Index, which covers New York, northern New Jersey and southern Connecticut.

Manufacturers may stay at the forefront of the economic expansion as they boost production to replenish depleted stockpiles and meet household and business demand. At the same time, the financial crisis in Europe and a slowdown in China may limit overseas sales.

“Improving consumer spending is helping power rising orders and production,” Joel Naroff, president of Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. “If the manufacturing sector is doing well, it tends to point to solid overall economic activity.”

Estimates of economists surveyed ranged from no change to 7.5. The headline index is based on a separate question and does not reflect changes in areas like orders and employment. For that reason, some economists consider it a measure of sentiment.

The Empire State gauge of shipments rose to 21 from 9.4. New factory orders increased to 5.1 from minus 2.1 last month. A measure of the number of employees climbed to 2.3 from minus 3.7.

Factory executives in the New York Fed’s district became more optimistic about the future, the report showed. The gauge measuring the outlook six months from now climbed to 52 from 39.