Factory activity in the U.S. mid-Atlantic region decelerated in September, falling more than expected from August, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index fell to 22.5 in September, down from August's reading of 28.0, which had been the best reading for the index since March 2011. Analysts were looking for a reading of 23.

Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.

It is seen as one of the first monthly indicators of the health of U.S. manufacturing leading up to the national report by the Institute for Supply Management.

The six-month business conditions index fell to 56.0 from 66.4 in August, though the employment subindex rose from 9.1 to 21.2, hitting its highest level since May 2011.