The latest survey from the Federal Reserve Bank of Richmond revealed on Tuesday that the U.S. fifth district's manufacturing softened in February.

According to the report, the composite manufacturing index dropped from 20 in January to -2 in February, as its three major components - shipments (to 1 in February from 29 in January), new orders (to -10 from 13), and employment (to 8 from 20) - declined. In addition, backlog of orders also decreased (to -6 from 9). Still, the index for local business conditions remained positive, and manufacturers were optimistic that activity would improve in the coming months, the Richmond Fed noted.

Economists had expected a reading of 13. A reading above 0 signals expansion, while a reading below 0 indicates contraction.