The Federal Reserve Bank of Kansas City has released its 10th district report on manufacturing activity. This is a September reading, and it does show continued weakness, but the good news is that the negative composite index reading of -8 compares to a reading of -9 in August.

Some bad news comes on the expectations front. The six-month expectations composite index was -12 in September, versus a reading of 0 in August, and the six-month expectations production index fell handily to -14 in September from a positive reading of 4 in August.

One issue that may have propped this number up, or that may have kept from sliding further, was that the manufacturing production index was up at 1 in September, versus -16 in August.

All in all, Thursday’s report indicated that manufacturing activity declined at the same time that the expectations for future activity dropped considerably. Survey respondents in this regional Fed report continued to blame a strong dollar and weak energy activity for the lower factory activity.

Investors generally overlook this economic report each month. The 10th Federal Reserve District covers a large geographic area: all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming. It also covers the western third of Missouri and the northern half of New Mexico.

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Additional data from the September report was as follows:

• The month-over-month composite index was -8 in September, largely unchanged from -9 in August and -7 in July.
• Both durable and nondurable goods production continued to decline, but some nondurable production (plastics, chemicals and food) improved.
• Durable goods production remained weak, particularly for metals and machinery products.
• Production indexes continued to fall in nearly all district states.
• The employment index did tick up to -7 in September from -10 in August.
• The new orders for exports index also moved slightly higher.
• The raw materials inventory index fell to -20 from -12, while the finished goods inventory index increased modestly.
• The future composite index dropped from 0 to -12, which was said to be the lowest reading since 2009.
• The future production, shipments and new orders indexes also posted six-year lows.
• The future order backlog index fell further from -13 to -20.
• The future employment index moved into negative territory for the first time in five months.
• The future capital expenditures index was largely unchanged at -1, while the future new orders for exports index eased somewhat.

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