The Federal Reserve Bank of Richmond reported on Tuesday its latest survey showed that manufacturing activity in the U.S. fifth district expanded moderately in March.

According to the survey, the composite index dropped from 16 in February to 10 in March but remained in expansionary territory. 

Economists had forecast the index to come in at 12.

The March decline came from drops in both the shipments (2 in March from 12 in February) and new orders (to 9 from 19) indexes, while the employment indicator, increased (to 23 from 15). 

The survey also noted that the firms were optimistic, expecting conditions to improve in the coming months.