The Richmond Fed manufacturing composite index improved but remained in contractionary territory at minus 5 in March versus minus 16 in February and minus 11 in January. The Econoday consensus forecast looked for a minus 8 figure.

New orders, the forward-looking indicator, improved to minus 11 in March from minus 24 in February. Shipments rose to 2 in March from minus 15 in February. Employment came in at minus 5 from minus 7. Wages were high again at 27 versus 31.

Prices paid continued to rise at 6.2 from 7.9 in February. Prices received registered 5.6 in March versus 5.5 in February.

Richmond Fed's manufacturing index is not expected to emerge from contraction in March, at a consensus minus 8 versus minus 16 and minus 11 the last two reports. Order readings in this report turned deeply negative in January and February.

This survey tracks business conditions in the Richmond Fed's manufacturing sector. The headline index is a composite of the new orders, shipments, and employment indexes.

Investors need to monitor the economy closely because it usually dictates how various types of investments will perform. By tracking economic data such as the regional Fed surveys, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more moderate growth so that it won't lead to inflation. These surveys give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since manufacturing is a major sector of the economy, this report has a big influence on market behavior.