03:07 PM EDT, 05/15/2024 (MT Newswires) -- New York manufacturing activity unexpectedly decreased into deeper contraction territory in May amid weakness in new orders, the Federal Reserve Bank of New York said Wednesday.

The Empire State Manufacturing Survey's general business conditions index fell to negative 15.6 this month from negative 14.3 in April. The consensus was for an improvement to negative 10 in a survey compiled by Bloomberg.

"Manufacturing conditions remained sluggish in New York State in May, with activity and orders continuing to decline," said Richard Deitz, economic research adviser at the New York Fed. "Labor market conditions were also weak, as employment and hours worked both fell."

New orders ticked lower to negative 16.5 in May from negative 16.2 last month, indicating an "ongoing significant decline," while shipments improved to negative 1.2 from negative 14.4, the Fed branch wrote.

The component measuring number of employees fell to negative 6.4 from negative 5.1. The prices paid index declined to 28.3 from 33.7, while prices received slid to 14.1 from 16.9, the May 2 to May 9 survey showed.

Delivery times shortened, while inventories were "little changed," the New York Fed said.

Six months out, the index for general business conditions dropped to 14.5 in May from 16.7 last month, indicating "subdued" outlook, the regional Fed said. Roughly 40% of survey respondents expect business conditions to improve, while "about a quarter" forecast a worsening, according to the report.

The index measuring future new orders edged lower to 17.7 from 17.9, while future shipments declined 9.2 points to 12.6. Expectations about the labor market improved, with the employment component rising 1.8 points to 6.3. The future capital spending index dropped to 2 from 6.7, suggesting that capital expenditure plans continue to be "soft," the New York Fed said.