A gauge of manufacturing in New York State jumped unexpectedly this month to its highest in five years on surging new orders, shipments and employment in the sector, the New York Federal Reserve said in a report on Thursday.

The New York Fed's Empire State general business conditions index rose to 34.57 in October from 18.88 in September. Economists polled by Reuters had expected an October reading of 18.00.

The reading was the highest since May 2004, when it was 34.97.

The Empire State Manufacturing Survey indicates that conditions for New York manufacturers improved significantly in October, the report said.

The report's gauge of employment rose to positive territory for the first time since June 2008 while new orders hit their highest since August 2005. The six-month outlook was the best since October 2004.

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