Growth in the New York state manufacturing sector picked back up in June, but the details were less encouraging as new orders contracted further and measures of employment weakened, a report from the New York Federal Reserve showed on Monday.

The New York Fed's "Empire State" general business conditions index rose to 7.84 from minus 1.43 in May, topping expectations for zero. A reading above zero indicates expansion.

But the forward-looking new orders index fell to minus 6.69 from minus 1.17, while inventories tumbled to minus 11.29 from minus 7.95.

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Employment gauges also worsened. The index for the number of employees slipped to zero from 5.68 and the average employee workweek index dropped to minus 11.29 from minus 1.14.

The outlook for firms was relatively resilient with the index of business conditions six months ahead edging down to 24.98 from 25.48.

"Sentiment may be improving but actual output isn't improving," said Michelle Meyer, senior economist at Bank of America Merrill Lynch in New York.

"This report suggests manufacturing activity is sluggish and that we are seeing that in the U.S. and the rest of the world."

The survey of manufacturing plants in the state is one of the earliest monthly guideposts to U.S. factory conditions.

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