PHILADELPHIA (AFX) - The Philadelphia Federal Reserve said its business activity index fell to -8.8 in May from -7.2 in April. The current prices paid index fell to 1.5 in May from a revised 7.0 in April, while the current prices received index stood at -2.2 after -8.4 in April. Among the report's other sub-indexes, new orders declined to -4.8 from -3.9 in April. The index of future general activity rose to 33.1 from 25.7 in April. "Nearly 50 pct of the manufacturing firms surveyed expect business conditions to improve over the next six months; only 17 pct expect deterioration in conditions," said the Philadelphia Fed. Almost 57 pct of companies surveyed are expecting new orders to rise while more than 50 pct see increases in shipments. The survey covers manufacturers in most of Pennsylvania and southern New Jersey.