April 2021 Texas Manufacturing Index Declines But Remains Strong

Of the four Federal Reserve districts which have released their April manufacturing surveys – all are in expansion.

The expectations from Econoday were 25.0 to 30.0 (consensus 27.5) for the general activity index and the reported value declined from 48.0 to 34.0. From the Dallas Fed:

Texas factory activity expanded at a markedly faster pace in March, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, surged 28 points to 48.0, its highest reading in the survey’s 17-year history.

Other measures of manufacturing activity also pointed to sharply faster growth this month. The new orders index rose 18 points to 30.5, and the growth rate of orders index rose 11 points to 22.7. The capacity utilization index rocketed from 16.5 to 46.1, an all-time high. The shipments index rose 17 points to 33.1.

Perceptions of broader business conditions improved markedly in March. The general business activity index posted another double-digit increase, rising 12 points to 28.9. The company outlook index shot up 15 points to 25.8, its highest reading since mid-2018. The outlook uncertainty index edged down to 5.5.

Labor market measures indicated robust growth in employment and work hours. The employment index came in at 18.8, up from 12.7 and well above average. Twenty-nine percent of firms noted net hiring, while 10 percent noted net layoffs. The hours worked index doubled from 11.3 to 23.4.

Price and wage pressures accelerated further in March. The raw materials prices index rose from 57.4 to 66.0 amid continued reports of supply-chain disruptions driving up costs. The finished goods prices index climbed nine points to 32.2, its highest reading since 2008. The wages and benefits index posted a double-digit increase, rising 12 points to 28.0.

Expectations regarding future manufacturing activity remained positive in March. The future production index was largely unchanged at 38.3, and the future general business activity index held steady at 33.7. Other measures of future manufacturing activity showed mix 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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