Manufacturers from upstate New York down to Delaware are seeing better business conditions this month, according to reports released Thursday by the Federal Reserve Banks of New York and Philadelphia.

The New York Fed said its general business conditions index rose to 20.21 in March from 19.53 in February. The March reading was the highest since June 2010.

The Philadelphia Fed's index of general business activity within its area factory sector rose to 12.5 in March from 10.2 in February. It was the highest reading since April 2011.

The surveys indicate the factory sector continues to lead the overall U.S. recovery at the end of the first quarter.

Unlike the national factory index compiled by the Institute for Supply Management, the regional Feds' top-line indexes aren't composites of subindexes measuring demand, sales and payrolls.

As a result, while the two Fed general readings increased, both regional surveys showed a slowing in new orders and shipments. And unfilled orders shrank in both areas.

On the plus side, employment in each region strengthened this month, a sign that New York and Philly manufacturers are hiring more workers. Labor Department data show nationally the factory sector has added jobs in each month from October to February.

The major difference in the two reports was the readings on input costs. The New York Fed prices-paid index nearly doubled to 50.62 from 25.88 in February, while the Philadelphia prices-paid index fell to 18.7 from 38.7.

Michael Trebing, senior economist who oversees the Philly survey, says economists at the Philly Fed have noticed their prices index leading the New York one by a month or so over the past year. He says one possible explanation is the different timing of each survey.

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