Global| Jul 25 2016Texas Factory Sector Activity Reverses Earlier Deterioration; Outlook Brightens
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Dallas indicated that its industrial activity in the state was little-changed during July, ending sharp declines since early last year. Its General Business Activity index rose to -1.3 this month from -18.3 [...]
The Federal Reserve Bank of Dallas indicated that its industrial activity in the state was little-changed during July, ending sharp declines since early last year. Its General Business Activity index rose to -1.3 this month from -18.3 in June, but it was at the highest level since December 2014. The level of unfilled orders surged to the highest level since November. The production series improved following two months of negative readings, and the growth rate of new orders rose to the highest level in two months. Employment also improved to its best reading in six months and the average workweek lengthened. Growth in wages & benefits, however, deteriorated sharply. Current pricing power improved versus Q4'15, but it remained restrained.
The outlook brightened significantly. The general business activity and company outlook readings, six months ahead, both surged to the highest levels in 12 months. Expected new orders and production both surged. Expected shipments and unfilled orders also gained. Hiring was expected to improve significantly along with the length of the factory workweek. Wages & benefits, however, were expected to weaken, reversing improvement since January.
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) | Jul | Jun | May | Jul'15 | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | -1.3 | -18.3 | -20.8 | -4.9 | -12.5 | 8.3 | 2.2 |
| Production | 0.4 | -7.0 | -13.1 | -1.7 | -1.0 | 14.5 | 9.8 |
| Growth Rate of Orders | -11.7 | -17.4 | -17.5 | -15.4 | -11.8 | 4.7 | 0.1 |
| Number of Employees | -9.7 | -18.6 | -14.7 | -3.9 | -0.4 | 11.5 | 5.6 |
| Prices Received for Finished Goods | -5.7 | -5.2 | -3.3 | -2.3 | -8.5 | 8.3 | 2.9 |
| General Business Activity Index Expected in Six Months | 18.4 | 2.6 | -1.8 | 19.3 | 4.1 | 17.4 | 11.0 |
| Production | 45.2 | 27.1 | 24.6 | 37.3 | 31.1 | 42.7 | 37.1 |
| Growth Rate of New Orders | 34.7 | 20.3 | 10.2 | 29.7 | 20.7 | 31.5 | 25.0 |
| Wages & Benefits | 30.0 | 31.6 | 31.4 | 31.5 | 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.
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