The latest survey from the Federal Reserve Bank of Richmond revealed on Tuesday that the U.S. fifth district's manufacturing activity continued to expand in January 2021, albeit at a slower pace than in December 2020.

According to the report, the composite manufacturing index dropped from 19 in December to 14 in January, the lowest since July, but remained in expansionary territory, as all three component indexes – shipments (at 10 in January, down from 12 in December), new orders (at 12 in January, down from 24 in December), and employment (at 23 in January, down from 20 in December) - posted positive readings. Manufacturers also reported that vendor lead times lengthened, with a corresponding index climbing from 31 in December to 39, its highest level since January 1996. Overall, manufacturers were optimistic that conditions would continue to improve in the coming months, the report added.