Growth in Philadelphia-area manufacturing activity unexpectedly saw a substantial acceleration 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 general activity surged up to 34.4 in May from 23.2 in April, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to dip to 21.0.
The jump by the headline index was partly due to a significant acceleration in the pace of growth in new orders, as the new orders index spiked to 40.6 in May from 18.4 in April.
The shipments index also rose to 25.8 in May from 23.9 in April, and the number of employees index climbed to 30.2 from 27.1.
The Philly Fed also said a notable share of firms reported higher prices for their own manufactured goods this month.
The prices received index increased to 36.4 in May from 29.8 in April, although the prices paid index fell to 52.6 from 56.4.
Looking ahead, the Philly Fed said the survey’s future indexes, measuring expectations for the next six months, reflected continued optimism.
The diffusion index for future general activity dropped to 38.7 in May from 40.7 in April but remains at an elevated level.
On Tuesday, the New York Fed released a separate report showing an unexpected rebound in the pace of growth in regional manufacturing activity in May.
The New York Fed said its general business conditions index jumped to 20.1 in May from 15.8 in April, while economists had expected the index to edge down to 15.0.