The Manufacturing Business Outlook Survey, released by the Federal Reserve Bank of Philadelphia on Thursday, revealed the expansion in the region's manufacturing activity accelerated in May.

According to the survey, the diffusion index for current general activity increased from 8.5 in April to 16.6 this month. That was the highest reading since January.

Economists had forecast the index to increase to 9.0 last month. 

A reading above 0 signals expansion, while a reading below 0 indicates contraction. 

The May increase in the headline index was due to gains in the indexes for shipments (to 27.6 from 18.4 in April) and employment (to 18.2 from 14.7). Meanwhile, the new orders index decreased modestly (to 11.0 from 15.7), but remained in the positive territory.

On the price front, prices paid accelerated (to 23.1 from 21.6), while prices received eased (to 17.5 from 20.0).