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Economy in Brief

Texas Factory Activity Collapses
by Tom Moeller  March 30, 2020

The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey that the General Business Activity Index weakened to -70.0 this month from 1.2 in February. The decline mirrored the readings from other regional Federal Reserve banks reported in recent weeks. The figure is a diffusion index with readings above zero indicating positive growth.

The production, shipments, new orders, employment and wages indexes each collapsed this month. Each measure indicated drastically lower readings for activity. Pricing power also fell to its weakest level since February 2016.

Expected business conditions readings in six months weakened notably as well, led by a collapse in production.

Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When all respondents report rising activity, the index will register 100. The index will register -100 when all respondents report a decrease. The index will be zero when the number of respondents reporting an increase equals the number reporting a decrease. 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 '19 2019 2018 2017
Current General Business Activity Index -70.0 1.2 -0.2 6.9 -0.7 25.8 20.6
   Production -35.3 16.4 10.5 10.5 9.0 21.4 20.2
   Growth Rate of New Orders -44.9 3.6 6.1 -2.0 -0.8 14.8 11.4
   Employment -23.0 -0.9 1.9 12.2 9.4 20.0 11.4
   Wages & Benefits 5.5 22.6 16.3 30.0 24.0 29.7 22.2
   Prices Received for Finished Goods -9.2 -0.1 -1.9 6.5 2.4 17.6 12.7
General Business Activity Index Expected in Six Months -39.5 18.0 7.6 18.4 7.2 31.6 34.5
   Production -18.7 35.0 38.9 51.5 36.1 48.5 46.8
   Growth Rate of New Orders -20.7 30.0 27.0 32.4 25.6 35.9 37.7
   Employment -16.7 20.4 25.3 37.5 26.7 37.6 -35.2
   Wages & Benefits 0.7 39.7 42.4 54.3 39.9 50.4 43.4
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