Texas factory activity expanded in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 12.9 to 6.2, suggesting growth continued but at a slower pace.
Other measures of current manufacturing activity also indicated slower growth in February. The new orders index was positive for the second month in a row, although it fell from 12.2 to 2.8. The capacity utilization index declined from 14.0 to 5.4, suggesting utilization rates increased less than last month. The shipments index plunged almost 20 points but stayed in positive territory, indicating slightly higher shipments in February.
Perceptions of broader economic conditions improved a bit in February. The general business activity index was positive for the third month in a row, although it dipped from 5.5 to 2.2. The company outlook index was also positive for a third consecutive month, but it fell from 12.6 to 6.3.
Labor market indicators were mixed in February. Hiring slowed with the employment index moving down to 2.0, and about 17 percent of employers reporting hiring and 15 percent noting layoffs. The average workweek index dipped into negative territory with a reading of –3.0, suggesting hours worked declined.
Price and wage pressures diminished in February. The raw materials price index came in at 15.8, down from 27.8 in January. The finished goods price index dropped from 10.2 to 4.6. The wages and benefits index fell to 12.9, indicating wages rose at a slower pace. Still, the great majority of manufacturers continued to note no change in compensation costs. Looking ahead, 42 percent of respondents anticipate further increases in raw materials prices over the next six months, while 23 percent expect higher finished goods prices.
Expectations regarding future business conditions continued to reflect optimism. The index of future general business activity edged up from 9.2 to 10.8. The index of future company outlook remained unchanged at 20.1. Indexes for future manufacturing activity fell, but remained in solid positive territory this month.
Source: Dallas Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
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Kansas Fed (hyperlink to reports):
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Dallas Fed (hyperlink to reports):
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Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
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Federal Reserve Industrial Production – Actual Data (hyperlink to report)
Holding this and other survey’s Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Dallas Fed survey (light blue bar).
Comparing Surveys to Hard Data
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In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.
