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Economy in Brief

Texas Factory Sector Activity Continues to Erode
by Tom Moeller  February 29, 2016

The Federal Reserve Bank of Dallas indicated that industrial activity in the state deteriorated sharply this month. The measure of general business activity of -31.8 was up slightly from January, but still near the lowest level since April 2009. The reading gained m/m due to the production figure, but new orders growth remained depressed. Shipments improved slightly, but employment growth was still negative. Wage & benefit growth continued to fall. Weakness in economic activity caused finished goods prices to decline, as they have since early last year.

Expectations for business activity in six months also remained negative, but less so than in the prior two months. The company outlook, employment and production readings improved along with future shipments. The earlier weakness in expected new orders also lessened. On the labor front, expectations for wages & benefits rebounded to the highest level since September. Worker hours jumped to the highest level since July.

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, % Balance) Feb Jan Dec Feb'15 2015 2014 2013
Current General Business Activity Index -31.8 -34.6 -21.6 -11.6 -12.5 8.3 2.2
   Production -8.5 -10.2 12.7 0.5 -1.0 14.5 9.8
   Growth Rate of Orders -17.4 -17.5 -13.5 -16.5 -11.8 4.7 0.1
   Number of Employees -11.1 -4.2 10.9 0.0 -0.4 11.5 5.6
   Prices Received for Finished Goods -12.5 -9.6 -15.5 -4.4 -8.5 8.3 2.9
General Business Activity Index Expected in Six Months -2.1 -24.0 -2.2 6.1 4.1 17.4 11.0
   Production 33.4 26.5 29.6 25.2 31.1 42.7 37.1
   Growth Rate of New Orders 18.7 16.8 16.7 12.9 20.7 31.5 25.0
   Wages & Benefits 34.5 28.5 29.7 37.4 33.2 43.1 38.2
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