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Economy in Brief

Texas Factory Sector Activity is Mixed; Production Improves but Demand Weakens
by Tom Moeller  October 26, 2015

The Federal Reserve Bank of Dallas indicated that production in the Texas Manufacturing Outlook Survey strengthened this month to the firmest point since December. It was up meaningfully following modest firming in September. Moving the other way, the growth rate of new orders eased. The rate of decline, however, moderated from earlier in the year. This combination left the business activity reading down moderately, but by less than early in the year. Also turning positive was growth in shipments volume to the strongest rate this year. Growth in employment was slightly positive and marked the first rise in six months. The company outlook reading improved but still was negative. The same was the case for finished goods prices.

Expectations for business activity in six months remained modestly positive as production sentiment improved along with orders. The latter figure remained muted, however, versus levels of the last two years. Expectations for employment also rose to the highest level of 2015, but remained down versus the prior two years. Wages & benefits were expected to rise yet growth was little-improved from last year's low. The company outlook also moved off this year's low.

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.

Long View of China Suggests Inevitable Slowdown from the Federal Reserve Bank of Dallas can be found here.

Texas Manufacturing Outlook Survey (SA) Oct Sep Aug Oct '14 2014 2013 2012
Current General Business Activity Index (% Balance) -12.7 -9.5 -15.8 10.2 8.3 2.2 -0.6
   Production 4.8 0.9 -0.8 14.2 14.6 9.8 8.7
   Growth Rate of Orders -7.7 -4.3 -14.0 9.8 4.7 0.1 -2.8
   Number of Employees 0.3 -6.1 -1.4 10.7 11.5 5.6 11.8
   Prices Received for Finished Goods -9.5 -10.9 -15.7 7.0 8.3 2.9 0.9
Expected Business Conditions in Six Months 4.1 4.8 3.4 13.1 17.4 11.0 7.6
   Production 34.3 24.7 28.0 40.7 42.7 37.1 32.4
   Growth Rate of New Orders 19.6 15.2 18.6 21.5 31.5 25.0 19.5
   Wages & Benefits 33.3 41.5 32.4 40.2 43.0 38.2 34.2
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