Manufacturing conditions in the region improved in June, according to a report by the the Philadelphia Federal Reserve Bank released on Thursday.
The broadest measure of manufacturing conditions increased from 6.7 in May to 15.2 in June. That is the highest reading for the index since December. Analysts polled by Thomson Reuters had forecast the Philly Fed business index to rise to 8 for the month of June. (Tweet this)
Any reading above zero indicates expansion in the region's manufacturing. The survey covers factories in eastern Pennsylvania, southern New Jersey and Delaware.
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It is seen as one of the first monthly indicators of the health of U.S. manufacturing, leading up to the national report by the Institute for Supply Management.
Nearly every component of the index rose from May. The reading on new orders rose to 15.2 in June from the May reading of 4.0, while the prices paid subindex surged to 17.2 from negative 14.2 in May.
On the downside, the employment index fell to 3.8 from 6.7.
Leading indicators up in May
Also on Thursday, the Conference Board released its Leading Economic Index report that increased 0.7 percent in May to 123.1, following a 0.7 percent increase in April, and a 0.4 percent increase in March.
Analysts had expected leading indicators to increase 0.4 percent in May.
"The U.S. LEI increased sharply again in May, confirming the outlook for more economic expansion in the second half of the year after what looks to be a much weaker first half," said Ataman Ozyildirim, Director, Business Cycles and Growth Research, at The Conference Board.
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"While residential construction and consumer expectations support the more positive outlook, industrial production and new orders in manufacturing are painting a somewhat more mixed picture."
The LEI is comprised of 10 components including manufacturer' new orders, stock prices, and average weekly initial claims for unemployment insurance. The full report is available at The Conference Board.
—Reuters contributed to this report.