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Economy in Brief

Texas Factory Sector Outlook Continues to Improve
by Gerald D. Cohen  February 25, 2019

The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey that the General Business Activity Index jumped to 13.1 in February from 1.0 in January. The index had fallen to a two-and-a-half year low of -5.1 in December 2018.

Individual measures of activity were mixed. The production index declined to 10.1 from 14.5 and shipments decreased to 10.7 from 11.4. Still, these measures were above their December readings. Meanwhile, the growth rate of orders, employment and wages & benefits rose. The index for finished goods prices received continued its slide, falling to its lowest level in 18 months. Since June 2018 the prices received index has fallen by 21 percentage points.

The index of expected business conditions in six months continued its rebound from its December low. However, expected production, growth in orders, employment, wages, and capital spending measures declined. Expected shipments and the amount of unfilled orders increased.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase. When all firms report rising activity, 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'17 2018 2017 2016
Current General Business Activity Index 13.1 1.0 -5.1 38.4 26.2 20.6 -8.9
   Production 10.1 14.5 7.3 29.5 21.8 20.2 2.4
   Growth Rate of New Orders 3.4 1.2 5.8 17.0 14.8 11.4 -7.3
   Employment 12.6 6.6 11.0 20.0 19.9 11.4 -4.9
   Wages & Benefits 28.9 27.4 29.2 33.4 29.4 22.2 17.6
   Prices Received for Finished Goods 5.2 6.4 6.6 23.3 17.7 12.7 -1.6
General Business Activity Index Expected in Six Months 17.7 11.7 3.2 40.0 32.2 34.6 8.9
   Production 44.3 53.4 32.7 46.5 48.1 46.8 35.8
   Growth Rate of New Orders 30.8 38.5 23.1 37.1 35.7 37.7 24.3
   Employment 33.2 39.4 28.2 34.3 37.6 35.2 16.8
   Wages & Benefits 47.0 47.7 45.0 49.4 50.5 43.4 34.8
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