The Federal Reserve Bank of Richmond released its survey of manufacturing activity on Tuesday. The composite index for manufacturing jumped to 22 in March from -4 in February. It was the highest level since April 2010.

Analysts had expected the index to increase to -1.

The increase was mainly driven by rises in shipments and new orders.

Shipments sub-index climbed to 27 in March from -11 in February, while new orders sub-index was up to 24 from -6.

The employment sub-index rose to 11 from 9.

"Overall, manufacturing activity increased markedly in March. The composite index for manufacturing climbed to a reading of 22, the highest since April 2010," the survey said.