Of the three Federal Reserve districts which have released their February surveys, two are forecasting growth and one is forecasting contraction. A complete summary follows.
Texas factory activity increased for the tenth month in a row in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 7.1 to 10.8, indicating output grew at a slightly stronger pace than in January.
Other measures of current manufacturing activity also reflected a pick up. The capacity utilization index edged up to 9.1, with a quarter of manufacturers noting an increase. The shipments index rose again in February, coming in at 13.3. Thenew orders index continued to indicate demand growth and was 9.5, down from 14.4 in January but above the levels seen toward the end of last year.
Perceptions of broader business conditions were not as positive this month as they were in January. The general business activity index fell to zero after eight positive readings in a row. The company outlook index also declined, from 15.9 to 3.4, hitting its lowest reading since last spring.
Labor market indicators reflected continued employment growth and longer workweeks. The February employment index edged up for a third consecutive month, rising to 9.9. Eighteen percent of firms reported net hiring compared with 8 percent reporting net layoffs. The hours worked index shot up from 3.4 to 12, reaching its highest level in more than two and a half years.
Upward pressure on prices and wages continued in February. The raw materials price index fell to 21.9 but remained high relative to what it was for most of 2013. The finished goods price index held steady at 11.2, a level well above the average over the last couple of years. Looking ahead, 43 percent of respondents anticipate further increases in raw materials prices over the next six months, while 33 percent expect higher finished goods prices. Compensation costs increased at a slightly stronger pace this month. The wages and benefits index rose from 21.6 to 25.8, hitting a six-year high.
Expectations regarding future business conditions remained optimistic in February, although most indexes of future activity fell from their January levels. The index of future general business activity moved down but posted a still-robust reading of 15.2. After hitting a three-year high last month, the index of future company outlook fell 12 points to 20.6.
Source: Dallas Fed
Summary of all Federal Reserve Districts Manufacturing:
Richmond Fed (hyperlink to reports):
Kansas Fed (hyperlink to reports):
Dallas Fed (hyperlink to reports):
Philly Fed (hyperlink to reports):
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New York Fed (hyperlink to reports):
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
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.