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It's ugly in Texas
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Dallas Fed Manufacturing fell more than expected in April, to the lowest reading since June 2009.
The composite index came in at -20.8; economists had expected the index to come in negative again, at -11.5, following a drop of -16 in April.
"We don’t feel confidence anywhere, but we are feeling cost pressures," said one of the respondents in the survey.
The focus of this report in the past few months has been the impact that the oil crash is having on businesses.
Several business leaders in industries that depend on the oil sector had noted a slowdown.
And even though oil prices have rebounded, businesses are still feeling the pinch.
A survey respondent in fabricated metal manufacturing said: "The oil and gas exploration and production industry continues to worsen since last year’s peak. While the degradation is leveling, the related business impact remains."
And a respondent in machinery manufacturing said: "We've maintained the position that we need to give the oil market time to settle, so our goal has been to survive until the third quarter. At that point, production and inventories will have stabilized and maybe our customers will be more comfortable entering the market."
The bad weather effect, largely blamed for the economy's weakness in Q1, seeped through for this wood product manufacturer: "Wet weather has slowed down the development of raw land into ready lots and the home construction process as well. It has affected our shipments for the last two months and will continue to moderate the construction pace for several months."
And in the midst of all this weakness, a respondent in printing noted wage pressures. As we've previously reported, the quits rate is surging – workers are more willing to leave their current jobs for better paying ones.
Here's the respondent's comment: "Our headcount is down as we've lost employees to competitors and other opportunities. We actually need to hire several employees in the next couple of months to hit staffing goals, hopefully tapering off by the end of the year. The labor market has become very competitive in Dallas–Fort Worth."
Here's the latest chart of the index:
(Dallas Fed)
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