Prior was +3Services index +14 vs +9 priorManufacturing shipments +16 vs -2 priorFifth District manufacturing activity improved in May, according to the most recent survey from the Federal Reserve Bank of Richmond. The future indexes for shipments and new orders increased further into positive territory. The expectations index for employment rose notably to 23 from 7. The local business conditions index decreased to 5 in May from 10 in April. Meanwhile, the future local business conditions index rose to 17 from 3. The average growth rates of prices paid and prices received decreased somewhat in May. Firms expected growth in prices paid to moderate slightly over the next 12 months.For background, the Federal Reserve Bank of Richmond's monthly Survey of Manufacturing Activity is one of five regional Fed surveys closely watched as early reads on U.S. factory conditions, alongside the Empire State, Philadelphia, Dallas, and Kansas City surveys. Released on the fourth Tuesday of each month at 10:00 a.m. ET, it covers manufacturers in the Fed's Fifth District, Maryland, the District of Columbia, Virginia, most of West Virginia, North Carolina, and South Carolina, drawing responses from roughly 100 to 190 plants. The headline composite index is a weighted average of three subindexes: new orders (40%), shipments (33%), and employment (27%). It is a diffusion index that ranges between +100 and -100, with positive readings signaling expansion and negative readings contraction. Markets watch the survey as a directional input for the national ISM Manufacturing PMI later in the cycle, and pay particular attention to its prices paid and prices received subindexes for early signals on goods inflation. This article was written by Giuseppe Dellamotta at investinglive.com.