Philadelphia-area manufacturing activity unexpectedly saw a continued contraction in the month of May, according to a report released by the Federal Reserve Bank of Philadelphia on Thursday.
The Philly Fed said its diffusion index for current activity edged down to a negative 1.8 in May from a negative 1.6 in April, with a negative reading indicating a contraction in regional manufacturing activity.
The slight decrease by the index came as a surprise to economists, who had expected the index to climb to a positive 3.0.
A contraction in new orders weighed on the headline index, as the new orders index slid to a negative 1.9 in May from 0.0 in April.
The unfilled orders index also dropped to a negative 8.8 in May from a negative 6.3 in April, while the delivery times index fell to a negative 14.6 from a negative 9.9.
On the other hand, the shipments index climbed to a negative 0.5 in May from a negative 10.8 in the previous month.
The number of employees index also jumped to a negative 3.3 in May from a negative 18.5 in April, although it remained negative for the fifth straight month.
The report also said the prices paid index rose to 15.7 in May from 13.2 in April, while the prices received index surged up to 14.8 from 7.4.
Looking ahead, the Philly Fed said the survey's future indicators receded from last month's readings but continue to suggest that the current weakness is expected to be temporary.
The diffusion index for future general activity dipped to 36.1 in May after reaching a fifteen-month high of 42.2 in April.
The New York Fed released a separate report on Monday showing an unexpected decline in regional manufacturing activity in May.
The general business conditions index slid to a negative 9.0 in May from a positive 9.6 in April, while economists had expected the index to remain positive at 7.0.
by RTT Staff Writer
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