Manufacturing activity throughout the three-state mid-Atlantic region grew more than expected in May, according to the Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook Survey.

The diffusion index for current manufacturing activity came in at 34.4 in May, beating April's reading of 23.2 and well ahead of Econoday's consensus estimate of 21.0. More than 43% of manufacturers reported increases in overall activity, while about 9% posted decreases.

The index for current new orders, which gauges the demand for manufactured goods, increased to 40.6 in May from 18.4 in the previous month.

The index for shipments improved to 25.8 from 23.9. For unfilled orders, the index advanced to a reading of 15.3, while delivery times fell to 18.5. Inventories slipped to 8.1.

The current jobs index rose to a seven-month high of 30.2, with nearly 37% of respondents reporting increases in employment.

While firms remain optimistic about the next six months, the diffusion index for future general activity was down to 38.7 in May from 40.7 a month ago.

The bank's survey covers eastern Pennsylvania, southern New Jersey and Delaware.