Global| Jun 25 2018Texas Factory Sector Index Improves Sharply; Pricing Power Strengthens
by:Tom Moeller
|in:Economy in Brief
Summary
The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index rose to 36.5 during June after increasing to 26.8 in May. The rise brought it to the highest level since [...]
The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index rose to 36.5 during June after increasing to 26.8 in May. The rise brought it to the highest level since February and up from 21.8 in April.
Movement amongst the sub-series was mixed. Production, shipments and growth in new orders declined. On the labor front, employment was little changed but the workweek series slipped. The delivery time series rose and indicated the slowest product delivery speeds since October 2015. Each series remained up sharply from 2016 lows.
The index for finished goods prices received strengthened to the highest level since July 2008. The raw materials price measure increased to the highest point since April 2011. The cost of labor rose sharply as the wages & benefits index increased to the highest point in four months.
The index of expected business conditions in six months rose m/m, but remained near its nine-month low. Movement amongst the sub-series was mixed. The future production series eased, but orders growth was unchanged. Future shipments fell while employment improved. Future wages & benefits rose to a five-month 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) | Jun | May | Apr | Jun'17 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | 36.5 | 26.8 | 21.8 | 15.0 | 20.6 | -8.9 | -12.5 |
| Production | 23.3 | 35.2 | 25.3 | 12.8 | 20.2 | 2.4 | -1.0 |
| Growth Rate of New Orders | 22.2 | 26.5 | 18.9 | 6.5 | 11.4 | -7.3 | -11.8 |
| Number of Employees | 23.9 | 23.4 | 17.8 | 10.2 | 11.4 | -4.9 | -0.4 |
| Wages & Benefits | 31.4 | 24.3 | 29.3 | 21.7 | 22.2 | 17.6 | 16.5 |
| Prices Received for Finished Goods | 26.2 | 20.5 | 17.0 | 3.8 | 12.7 | -1.6 | -8.5 |
| General Business Activity Index Expected in Six Months | 35.9 | 30.0 | 31.9 | 31.7 | 34.5 | 8.9 | 4.1 |
| Production | 47.9 | 58.0 | 52.3 | 47.6 | 46.8 | 35.8 | 31.1 |
| Growth Rate of New Orders | 37.7 | 37.7 | 37.8 | 35.6 | 37.7 | 24.3 | 20.7 |
| Number of Employees | 39.8 | 37.6 | 35.4 | 32.6 | 35.2 | 16.8 | 14.7 |
| Wages & Benefits | 53.2 | 50.6 | 50.1 | 44.6 | 43.4 | 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.
More Economy in Brief
