Of the three Federal Reserve districts which have released their January manufacturing surveys – all are in expansion.
Analyst Opinion of Dallas Fed Manufacturing Survey
Important subindices new orders significantly declined (remains in expansion) and unfilled orders also significantly declined (remains in expansion). This should be considered a much worse report than last month. Data were collected Jan. 12-20, and 111 Texas manufacturers responded to the survey.
The expectations from Econoday were ——– (consensus —-) for the general activity index and the reported value declined from 26.8 to 4.6. From the Dallas Fed:
Texas factory activity continued to expand in January, albeit at a markedly slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 26.8 to 4.6, indicating a sharp deceleration in output growth.
Other measures of manufacturing activity also point to more muted growth this month. The new orders index dropped 13 points to 6.3, and the growth rate of orders index fell from 15.9 to 5.9. The capacity utilization index declined 10 points to 9.2, and the shipments index fell from 23.4 to 13.5.
Perceptions of broader business conditions continued to improve in January. The general business activity index remained positive but edged down from 10.5 to 7.0. The company outlook index also stayed in positive territory but retreated, from 18.2 to 10.3. Uncertainty regarding companies’ outlooks continued to rise; the index increased six points to 19.3.
Labor market measures indicated slightly slower growth in employment and a continued increase in work hours. The employment index came in at 16.6, down from 20.9 but still indicative of increased head counts. Twenty-seven percent of firms noted net hiring, while 11 percent noted net layoffs. The hours worked index pushed up from 9.5 to 12.6.
Price and wage indexes showed mixed movements in January but continued to reflect increases. The raw materials prices index rose from 50.8 to 55.0, its highest reading in nearly 10 years. The finished goods prices index remained elevated but slipped from 19.0 to 13.9. The wages and benefits index remained positive but edged down two points to 17.6, roughly in line with its series average.
Expectations regarding future activity remained positive in January, though some key indexes weakened from their December readings. The future production index ticked down from 47.3 to 43.7, while the future general business activity index shot up 12 points to 29.6. Other measures of future manufacturing activity showed mixed movements but remained solidly in positive territory.
Dallas Fed (hyperlink to reports):
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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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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 (red 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.
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