The Milwaukee-area industrial economy has reached a crossroads.

Local manufacturing activity improved in June, but the gains were modest and not all manufacturers benefited, according to a report Tuesday from the Milwaukee chapter of the Institute for Supply Management.

The institute's June manufacturing index rose seven points from the previous month to a reading of 50, putting it at what economists call the "boom-bust line." A reading above 50 means growth; below 50 means contraction.

"It's a very confusing economy right now," said Michael Uzelac, owner of Uzelac Industries, a Greenfield metal fabricator. "You hear a lot of talk about things loosening up in the economy, but companies aren't necessarily releasing purchase orders."

The manufacturing index was one of several indicators released Tuesday:

- The New York-based Conference Board said its Consumer Confidence Index stands at 49.3, down from a revised May level of 54.8. Economists surveyed by Thomson Reuters had projected confidence would hold steady at 55 this month after surges in April and May, helped by a stock market rally that has since shown signs of fizzling.

- The Standard & Poor's/Case-Shiller index showed home prices in 20 major cities -- Milwaukee is not included -- dropped by 18.1% in April compared with April 2008. While it marked the third straight month the index didn't set record price declines, a recovery in housing is still a long way off. The index is down almost 33% from its peak in the second quarter of 2006.

Together, the statistics gave investors little incentive to buy stocks on Tuesday, the last day of the second quarter. The Dow fell 82.38, or 1%, to 8,447.00. The S&P 500 fell 7.91, or 0.9%, to 919.32, and the Nasdaq slid 9.02, or 0.5%, to 1,835.04.

Still, the Dow rose 11% during the quarter, while the S&P 500 surged 15.2% -- their first quarterly gains since the third quarter of 2007. The Dow had its best quarter since 2003 and the S&P 500 its best since 1998. The Nasdaq, heavily populated by tech stocks, rose 20% for its first winning quarter in a year and its best since 2003.

The Milwaukee-area manufacturing index, which is based on a survey of local industrial companies, was up 11 points from a year ago. June's index was the highest in 16 months and was up considerably from a record-low 29 in February.

Manufacturing has improved, even if some of the gains are barely perceptible, according to economists.

"Clearly there appears to be more activity in the marketplace. But many companies will tell you the optimism hasn't yet translated to a significant increase in new orders," said Tim Hanley of the accounting firm Deloitte & Touche in Milwaukee.