02:23 PM EDT, 06/17/2024 (MT Newswires) -- New York manufacturing activity improved more than expected in June but remained in contraction territory as orders and shipments improved, while the outlook for business activity six months out reached a more than two-year high, the Federal Reserve Bank of New York said Monday.

The Empire State Manufacturing Survey's general business conditions index climbed to negative 6 this month from negative 15.6 in May. The consensus was for a smaller improvement to negative 11.3 in a survey compiled by Bloomberg.

"Manufacturing conditions remained weak in New York State in June," said Richard Deitz, economic research adviser at the New York Fed. "Employment continued contracting, and capital spending plans remained flat."

New orders recovered by more than 15 points to negative 1 in June, suggesting the gauge for demand was flat, the Fed branch said. Shipments swung to 3.3 from negative 1.2 in May.

The component measuring number of employees dipped 2.3 points to negative 8.7 and the metric charting hours worked slid 4.1 points to negative 9.9. The data points "to an ongoing decline in employment levels and hours worked," the Fed said.

The prices paid index declined to 24.5 in June from 28.3 last month, while prices received dropped to 7.1 from 14.1, the survey showed.

The survey was carried out between June 3 and June 10.

Six months out, the index for general business conditions rallied to 30.1 this month from 14.5 in May, with nearly half of respondents expecting conditions to improve, the Fed said. "Despite lackluster conditions, optimism about the six-month outlook rose to its highest level in over two years," Deitz said.

The index measuring future new orders jumped 12 points to 30, while future shipments climbed 16 points to 28.7. Expectations about the labor market improved slightly at the number of employees level but declined 8.2 points into contraction at the workweek level, suggesting that the outlook for employment growth remains weak, the Fed said.