Global| Aug 29 2016Texas Factory Sector Activity Deteriorates; Production Increases
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Dallas indicated that its General Business Activity index declined to -6.2 this month from -1.3 in July. These figures represent improvement, however, from readings as low as -34.6 in January. The [...]
The Federal Reserve Bank of Dallas indicated that its General Business Activity index declined to -6.2 this month from -1.3 in July. These figures represent improvement, however, from readings as low as -34.6 in January. The production figure of 4.5 was up from -13.1 three months ago. The growth rate of new orders also improved to 2.1, the best reading since October 2014. In addition, shipments strengthened. Hiring did not improve, however, as the employment index remained negative as it has been all year. Growth in wages & benefits deteriorated. Pricing power improved as indicated by the prices received index at -1.3, up from -15.5 in December.
The index of future business activity deteriorated to 7.0, but indicated improvement versus a low of -24.0 in January. The future production series fell to 32.8 from 45.2, but remained up from the 24.6 low six months ago. Expected orders and shipments growth also deteriorated m/m, but remained greatly improved versus three months ago. The index of expected wages & benefits to be paid in six months jumped sharply to the highest level since last September.
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) | Aug | Jul | Jun | Aug'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | -6.2 | -1.3 | -18.3 | -16.3 | -12.5 | 8.3 | 2.2 |
| Production | 4.5 | 0.4 | -7.0 | -1.5 | -1.0 | 14.5 | 9.8 |
| Growth Rate of Orders | 2.1 | -9.7 | -18.6 | -12.7 | -11.8 | 4.7 | 0.1 |
| Number of Employees | -5.0 | -2.6 | -11.5 | -3.6 | -0.4 | 11.5 | 5.6 |
| Prices Received for Finished Goods | -1.3 | -5.7 | -5.2 | -15.0 | -8.5 | 8.3 | 2.9 |
| General Business Activity Index Expected in Six Months | 7.0 | 18.4 | 2.6 | 3.6 | 4.1 | 17.4 | 11.0 |
| Production | 32.8 | 45.2 | 27.1 | 27.6 | 31.1 | 42.7 | 37.1 |
| Growth Rate of New Orders | 27.2 | 34.7 | 20.3 | 18.4 | 20.7 | 31.5 | 25.0 |
| Wages & Benefits | 38.1 | 30.0 | 31.6 | 32.8 | 33.2 | 43.1 | 38.2 |
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.
