NEW YORK -- New York manufacturing activity accelerated in March, according to the Federal Reserve Bank of New York's Empire State Manufacturing Survey released Thursday. But prices pressures jumped this month.

The Empire State's business conditions index increased for the fourth consecutive month to 20.21 from 19.53 in February.

The March index was the highest in well over a year. Economists surveyed by Dow Jones Newswires had expected the index to drop to 17.9.

The Empire subindexes remained positive but some slowed in March. The new orders index fell to 6.84 in March from 9.73 last month. The shipments index dropped to 18.21 from 22.79.

Better news came on labor conditions. The employment index increased to 13.58 from 11.76 and the workweek index jumped to 18.52 from 7.06.

Cost pressures surged this month. The prices paid index almost doubled to 50.62 from 25.88 in February. "The last time the index was this high was in summer 2011," the report said.

The prices received index fell to 13.58 from 15.29.

The expectation indexes slowed but still showed "a high degree of optimism," the New York Fed said.

The general business conditions expectations index for the next six months declined to 47.50 from 50.38.

The employee expectations index rose to 32.10 in March from 29.41 last month.

In response to a series of special questions about borrowing needs, 57.7% of respondents said there was no change in their needs compared to a year ago, another 25.6% said the need was higher and only 16.7% said it was lower.

When asked about credit availability, 72.5% said it was the same compared to a year ago, 13.8% said it was tighter and another 13.8% said it was easier.

-By Kathleen Madigan, Dow Jones Newswires, 212-416-2466, kathleen.madigan@dowjones.com