Global| Jan 29 2018Texas Factory Index Nears 2005 High
by:Tom Moeller
|in:Economy in Brief
Summary
Business in Texas is strengthening. The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the January General Business Activity Index increased to 33.4, its highest level in more than 12 years, [...]
Business in Texas is strengthening. The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the January General Business Activity Index increased to 33.4, its highest level in more than 12 years, suggesting firm growth in the factory sector. The shipments and the inventories measures both strengthened. The production and new orders indexes declined, but remained firm versus 2017. The jobs index eased, but remained up sharply y/y. The workweek series displayed similar behavior.
Finished goods prices received surged to the highest level since early-2011 and the raw material prices measure remained firm. Both remained up sharply versus earlier lows. The wages & benefits measure eased m/m but also strengthened y/y.
The index of expected business conditions in six months improved to the highest level since December 2004. Expected production was strong as were expected orders and shipments. The future employment index jumped to a record high. The measure of expected wages & benefits also increased to a record high.
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) | Jan | Dec | Nov | Jan'17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | 33.4 | 29.7 | 19.4 | 22.1 | 20.4 | -8.8 | -12.5 |
| Production | 16.8 | 32.8 | 15.1 | 11.9 | 19.5 | 2.4 | -1.0 |
| Growth Rate of New Orders | 15.5 | 21.4 | 18.1 | 6.7 | 10.0 | -7.3 | -11.8 |
| Number of Employees | 15.2 | 20.4 | 6.3 | 6.1 | 10.9 | -4.9 | -0.4 |
| Wages & Benefits | 23.3 | 25.1 | 14.2 | 20.8 | 21.7 | 17.6 | 16.5 |
| Prices Received for Finished Goods | 22.3 | 17.9 | 15.1 | 17.7 | 12.3 | -1.6 | -8.5 |
| General Business Activity Index Expected in Six Months | 44.5 | 40.9 | 39.0 | 43.7 | 35.1 | 8.9 | 4.1 |
| Production | 51.6 | 47.4 | 46.1 | 53.9 | 46.6 | 35.8 | 31.1 |
| Growth Rate of New Orders | 40.4 | 40.1 | 40.9 | 48.4 | 37.8 | 24.3 | 20.7 |
| Number of Employees | 44.5 | 36.6 | 29.8 | 37.7 | 35.2 | 16.7 | 14.7 |
| Wages & Benefits | 56.9 | 44.2 | 46.6 | 42.5 | 43.6 | 34.8 | 33.2 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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