The Dallas Federal Reserve’s manufacturing activity index for September was -3.7.
Although the headline index missed expectations, some details of the report showed a month-on-month pickup.
The index of production rose, while the readings of capacity utilization and shipments increased to the best levels in about two years.
Economists had forecast that the overall index of activity would once again be negative, at -3. That would be an improvement from the reading of -6.2 reported in August. The index was last positive in December 2014.
On aggregate, business leaders were more optimistic about the future, as the company outlook index turned positive for the first time since November 2015. The gauge of future business activity was above zero for a fourth straight month.
But some of their comments, highlighted anonymously in the Dallas Fed’s report, showed that there are still ongoing concerns about the economy, skilled-labour shortages, and oil prices. Since oil prices crashed in 2014, this report has provided some key anecdotes on the impact of the energy downturn on the oil-rich region.
Someone in machinery manufacturing expressed pessimism about the deep-water drilling industry:
“We’ve tried to hold on to a critical mass, but the slowdown has now reached a point where we have to cut so much of our staff that we’ll be only a fraction of a company going forward. My order book is abysmal.”
“Finding qualified skilled and unskilled workers continues to be a problem,” said someone in fabricated metal product manufacturing. “Customers want price reductions and employees want higher wages; neither will be satisfied.”
“The economy is still a big concern,” added a maker of transportation equipment.
“We continue to bump along in a low-growth environment,” a computer maker told the Dallas Fed. “We don’t see that changing at any point in the future. Things are not bad, but are not good.”