The Federal Reserve Bank of Richmond released its survey of manufacturing activity on Tuesday. The composite index for manufacturing declined to -4 in February from 2 in January. Analysts had expected the index to remain unchanged at 2.

The decrease was mainly driven by declines in shipments and new orders.

Shipments sub-index slid to -11 in February from -6 in January.

New orders sub-index was down to -6 from 4.

The employment sub-index remained unchanged at 9.

"Shipments and the volume of new orders decreased modestly this month. Manufacturing hiring continued to increase at a modest pace, while average wages grew mildly and the average workweek lengthened slightly. Prices of raw materials and finished goods rose at a slower pace this month, compared to January," the survey said.