April 2018 Texas Manufacturing Survey Growth Significantly Improves

Of the five Federal Reserve districts which have released their April manufacturing surveys – one was in contraction and the rest in expansion. A complete summary follows.

The expectations from Bloomberg / Econoday was 14.0 to 19.0 (consensus 18.0), and the reported value was 25.3. From the Dallas Fed:

Texas factory activity rose markedly in April after posting slower growth in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, increased 11 points to 25.3.

Other indexes of manufacturing activity also rose sharply in April. The new orders and growth rate of orders indexes jumped to their highest readings this year, 27.9 and 18.9, respectively. The capacity utilization index climbed eight points to 18.7, and the shipments index rose nine points to 19.3.

Perceptions of broader business conditions remained highly positive on net in April. The general business activity index was largely unchanged at 21.8, and the company outlook index edged up four points to 23.6. Both indexes remained far above their average levels.

Labor market measures suggested stronger growth in employment and work hours in April. The employment index came in at 17.8, up six points from March. Twenty-four percent of firms noted net hiring, compared with 6 percent noting net layoffs. The hours worked index moved up four points to 14.3.

Price and wage pressures remained elevated in April. The raw materials prices index ticked up to 46.3, its highest reading in seven years, while the finished goods prices index edged down to 17.0. The wages and benefits index rose five points to 29.3, with 30 percent of firms reporting an increase in pay from March.

Expectations regarding future business conditions remained largely optimistic in April. The index of future general business activity held steady at 31.9, and the index of future company outlook rose to 37.1. Both readings are significantly above average. Other indexes for future manufacturing activity pushed further into positive territory.

Source: Dallas Fed

Summary of all Federal Reserve Districts Manufacturing:

Richmond Fed (hyperlink to reports):

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Kansas Fed (hyperlink to reports):

z kansas_man.PNG

Dallas Fed (hyperlink to reports):

z dallas_man.PNG

Philly Fed (hyperlink to reports):

z philly fed1.PNG

New York Fed (hyperlink to reports):

z empire1.PNG

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:

z survey1.png

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.

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