A reading of manufacturing activity in Texas rose more than expected this month, joining the list of a number of other regional gauges that have recently rebounded.
The Dallas Fed manufacturing index was reported at -13.6 for March.
Economists had forecast that the index rose to -26 from -31.8 in the prior month, according to Bloomberg.
The index has not been positive since December 2014. Regional manufacturing activity tanked as national output also slowed. And, the oil crash hurt manufacturers tied to the energy industry.
“The weakness in early 2016 was a little bit overstated,” Gus Faucher, deputy chief economist at PNC, told Business Insider. “In particular, there was a lot of drag from energy, which will fade over time.”
Faucher does not think the manufacturing sector is quite out of the woods yet. He’s forecasting a rebound in the March ISM manufacturing PMI, due Friday, to 50.3 from 49.5. This would show that the sector is not really contracting, but not really expanding either, he said.
The production index for Texas turned positive after two months in the red. The gauge of new orders increased but was still negative, at -4.8, as did the index of general business activity.
The employment index stayed negative.
A survey respondent in chemical manufacturing noted that the slowdown in the dollar’s rally, and an increase in inflation, lifted European sales.