Global| Jul 31 2017Texas Factory Sector Improvement Continues
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the July General Business Activity Index improved slightly to 16.8 and made up most of June's decline. The index remained, however, well below [...]
The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the July General Business Activity Index improved slightly to 16.8 and made up most of June's decline. The index remained, however, well below the February high of 24.5. The production reading rebounded sharply and returned to the recent high, while the growth rate of new orders showed similar improvement. These figures remained up significantly versus the lows of early last year. Shipments improved just modestly. The number of employees reading improved to the highest level since September 2014 and the average workweek lengthened. Capital spending eased slightly m/m but was up y/y.
On the pricing front, the index for prices received rose slightly m/m, but was down sharply from the February high. Raw materials pricing power fell to the weakest point in twelve months. On the labor pricing front, wages & benefits eased m/m, but were up y/y.
Expectations for business activity in six months held fairly steady at a level down sharply versus January's peak. The future production reading also was roughly stable m/m, and remained lower than the December peak. Expected new orders growth eased. Expected shipments improved along with the future order backlogs reading. Expected employment rebounded slightly following a sharp decline, but expected wages strengthened to a more than three year 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) | Jul | Jun | May | Jul'16 | 2016 | 2015 | 2014 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | 16.8 | 15.0 | 17.2 | 0.1 | -8.8 | -12.5 | 8.4 |
| Production | 22.8 | 12.3 | 23.3 | 1.2 | 2.4 | -1.0 | 14.5 |
| Growth Rate of Orders | 12.2 | 4.7 | 12.3 | -7.9 | -7.3 | -11.8 | 4.7 |
| Number of Employees | 11.2 | 9.6 | 8.3 | -2.8 | -4.9 | -0.4 | 11.5 |
| Prices Received for Finished Goods | 5.6 | 3.6 | 5.9 | -4.6 | -1.6 | -8.5 | 8.3 |
| General Business Activity Index Expected in Six Months | 31.6 | 31.9 | 31.6 | 20.0 | 8.9 | 4.1 | 17.4 |
| Production | 48.8 | 47.5 | 49.7 | 45.9 | 35.8 | 31.1 | 42.7 |
| Growth Rate of New Orders | 32.8 | 35.7 | 36.4 | 35.6 | 24.3 | 20.7 | 31.5 |
| Number of Employees | 36.2 | 32.3 | 43.1 | 18.9 | 16.7 | 14.7 | 28.6 |
| Wages & Benefits | 45.9 | 44.7 | 42.7 | 30.5 | 34.8 | 33.2 | 43.1 |
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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