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Economy in Brief

Texas Factory Sector Growth Eases
by Tom Moeller  March 25, 2019

The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey that the General Business Activity Index backpedaled to 8.3 during March and reversed some of its February Improvement. The index remained well above its low of -5.1 in December 2018.

Notable weakness in the March index was confined to the shipments, new orders growth and capital spending readings. The shipments figure of 5.8 roughly matched its two-year low and was down from 39.5 in April of last year. The new orders growth rate figure of -1.9 was its first negative reading since late-2016 and was lower than the 23.2 high in December 2017. Readings elsewhere improved m/m but remained depressed y/y. The production index inched higher to 11.5 but was two-thirds below the level early last year. The employment figure also improved slightly to 13.1 but was below 23.9 high registered last June.

Wages & benefits continued to improve versus a November low. The index for finished goods prices received rose slightly to 6.9 and was up from the low of -16.6 in December 2015. It remained well below the high of 23.3 in February of last year.

The index of expected business conditions in six months continued to rebound from its December low. The March level of 19.7, however, was one-half the reading early last year. The production, employment and wage figures exhibited more of an improvement recently.

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) Mar Feb Jan Mar'18 2018 2017 2016
Current General Business Activity Index 8.3 13.1 1.0 22.8 26.2 20.6 -8.9
   Production 11.5 10.1 14.5 14.4 21.8 20.2 2.4
   Growth Rate of New Orders -1.9 3.4 1.2 5.3 14.8 11.4 -7.3
   Employment 13.1 12.6 6.6 11.7 19.9 11.4 -4.9
   Wages & Benefits 30.1 28.9 27.4 24.1 29.4 22.2 17.6
   Prices Received for Finished Goods 6.9 5.2 6.4 19.2 17.7 12.7 -1.6
General Business Activity Index Expected in Six Months 19.7 17.7 11.7 31.6 32.2 34.6 8.9
   Production 51.3 44.3 53.4 46.0 48.1 46.8 35.8
   Growth Rate of New Orders 32.6 30.8 38.5 33.6 35.7 37.7 24.3
   Employment 37.9 33.2 39.4 34.7 37.6 35.2 16.8
   Wages & Benefits 54.4 47.0 47.7 48.5 50.5 43.4 34.8
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