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Economy in Brief

Texas Factory Sector Activity Softens
by Tom Moeller  May 26, 2015

Deterioration in economic activity is spreading throughout the country. The Federal Reserve Bank of Dallas indicated that Texas business conditions eased sharply this month. The overall business activity index deteriorated to its weakest level since the recession as did the production component. The growth rate of new orders held for the third straight month near the recovery's weakest point. The company outlook measure deteriorated to a new low as did the employment measure. The pricing power growth rate indicated a steady rate of deflation.

Despite these shortfalls, expected business conditions improved slightly this month. The reading for expected business activity recovered m/m but remained well below its high early last year. The company outlook measure gained as well but was quite depressed versus the early 2014 high. Showing some strength was the production outlook component as it improved to the highest level since November. Expected orders growth also increased to its best level since November along with shipments. Future wages & benefits paid deteriorated sharply and was well below the January 2014 high.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase. When all firms report that activity has increased, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase or decrease is equal. Items may not add up to 100% because of rounding. Data for the Texas Manufacturing Outlook can be found in Haver's SURVEYS database.

Texas Manufacturing Outlook Survey (SA) May Apr Mar May '14 2014 2013 2012
Current General Business Activity Index (% Balance) -20.8 -16.0 -17.4 8.6 8.3 2.2 -0.6
   Production -13.5 -4.7 -5.2 11.6 14.6 9.8 8.7
   Growth Rate of Orders -15.2 -15.5 -15.3 3.9 4.7 0.1 -2.8
   Number of Employees -8.2 1.8 -1.8 3.3 11.5 5.6 11.8
   Prices Received for Finished Goods -8.7 -7.7 -9.8 6.2 8.3 2.9 0.9
Expected Conditions in Six Months 4.9 -5.9 3.0 12.1 17.4 11.0 7.6
   Production 38.6 28.2 36.2 37.0 42.7 37.1 32.4
   Growth Rate of New Orders 27.3 19.6 28.3 30.6 31.5 25.0 19.5
   Wages & Benefits 30.6 34.2 34.2 43.1 43.0 38.2 34.2
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