Growth at U.S. Mid-Atlantic factories slipped in November as new orders declined, according to an influential report published Thursday.

The Philadelphia Federal Reserve Bank said its business activity index fell to 11.5 in November from 17.3 in October, below Wall Street's median forecast for a dip to 15.3.

A reading above zero points to growth in the region's manufacturing.

If the drop is reflected in national data due out early next month, it could be a sign that an expected pickup in industrial activity may not materialize.

Still, economists emphasized that these growth levels were respectable and noted the index tends to be volatile from month to month.

"The message is that manufacturing is improving a little in the fourth quarter after finishing the third quarter quite weakly," said David Sloan, senior economist at 4Cast Ltd.

Analysts are forecasting economic growth to slow only slightly in 2006, in part because they see a pick-up in investment making up for an expected slowdown in consumer spending.

October was a solid month for U.S. factories with industrial output data released earlier Thursday showing a robust 0.9 percent increase in business activity for the sector last month.

The new orders index -- a key indicator of future growth -- retreated to 12.7 in November from 18.6 in October, while the employment index rose to 19.1 from 17.0. A measure of prices paid by manufacturers backed off from very high levels, easing to 56.8 from 67.6.

The six-month outlook improved to 29.2 from 22.0.

"Firms expect continued growth in their businesses over the next six months, with one-fourth indicating that they will increase employment," the Philadelphia Fed said in its report.

The regional survey is one of the first indicators of U.S. manufacturing every month and is often used to gauge the overall state of factories across the United States.

A more complete picture will come early in December, when the Institute for Supply Management releases its national survey for November.