The report from the New York Federal Reserve showed on Friday that manufacturing activity in the New York region continued to deteriorate significantly in early May.

According to the survey, NY Fed Empire State manufacturing index rose from record low -78.2 in April to -48.5 in May, but remained well below zero. That was the second-worst reading in the survey's history.

Economists had expected the index to come in at -63.5

Anything below zero signals contraction.

According to the report, new orders and shipments continued to decrease sharply, though not as steeply as in April. Meanwhile, employment fell somewhat further in May after plunging last month. Elsewhere, delivery times were slightly shorter than last month, and inventories were slightly lower. On the price front, the prices paid index indicated modest selling price increases, while the prices received index pointed to a second consecutive monthly decline in selling prices.