Manufacturing business activity in the Federal Reserve Bank of Richmond's district fell back into mild contraction with the Richmond Fed's composite manufacturing index at -4 in March versus 6 in February, minus 4 in January and minus 10 in December. The Econoday consensus looked for a positive 5 figure.

New orders, the forward-looking indicator, came in at minus 4 in March versus 0 in February, minus 4 in January, and minus 11 in December. Shipments were at minus 7 in March versus 12 in February, minus 9 in January, and minus 11 in December.

Employment came in at minus 1 in March versus 9 in February, 3 in January and minus 8 in December. Wages came in at 19 in March versus 21 in February 22 in January, and 16 in December.

Price pressures edged up. Not seasonally adjusted prices paid registered 3.75 in March versus 2.23 in February, 2.37 in January, and 2.86 in December. NSA prices received registered 2.34 in March versus 1.62 in February, 1.21 in January, and 1.71 in December.

Forecasters see the index roughly flat at 5.0 in March versus 6.0 in 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.