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Economy in Brief

Texas Factory Sector Growth Weakens; Expectations Steady
by Tom Moeller  April 29, 2019

The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey that the General Business Activity Index declined to 2.0 during April and added to its March retreat. Nevertheless, the index remained well above its low of -6.9 in December 2018.

Weakness in the April index reflected lower readings for employment, wages & benefits and delivery times. The production figure improved as did capacity utilization, new orders and capital spending.

The finished goods prices received index was fairly steady m/m at a level well below the high in June of last year, but the raw materials price index fell sharply.

The index of expected business conditions in six months held steady m/m at 18.4, but remained down sharply from the high in January of last year. The production, new orders, shipments, employment and wage figures each weakened.

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) Apr Mar Feb Apr'18 2018 2017 2016
Current General Business Activity Index 2.0 6.9 11.6 21.7 25.8 20.6 -8.9
   Production 12.4 10.5 9.2 25.1 21.8 20.2 2.4
   Growth Rate of New Orders 5.2 -2.0 3.5 18.6 14.8 11.4 -7.3
   Employment 4.6 12.2 11.7 18.3 20.0 11.4 -4.9
   Wages & Benefits 28.2 30.0 28.8 29.7 29.7 22.2 17.6
   Prices Received for Finished Goods 6.0 6.5 4.8 17.0 17.6 12.7 -1.6
General Business Activity Index Expected in Six Months 18.4 18.4 16.4 31.5 31.6 34.5 8.9
   Production 41.3 51.5 44.5 52.9 48.5 46.8 35.8
   Growth Rate of New Orders 27.5 32.4 30.4 38.3 35.9 37.7 24.3
   Employment 33.4 37.5 32.9 35.7 37.6 35.2 16.7
   Wages & Benefits 38.8 54.3 46.8 50.7 50.4 43.4 34.9
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