Texas Factory Sector Index Slips

The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the April General Business Activity Index declined to 21.8, the lowest level since November and down from the February high of 38.4.

Despite the decline in the overall index, most of the sub-series improved including production, growth in new orders and shipments. On the labor front, employment, wages & benefits and the workweek series rose m/m. Each series was up sharply from the 2016 low.

The index for finished goods prices received declined to the lowest level since November. The raw materials prices measure, however, improved to the strongest point since early-2011. The cost of labor increased as wages & benefits rose slightly m/m, but remained below the February high.

The index of expected business conditions in six months was fairly steady m/m, but declined to the lowest level since August. It was down sharply versus a January high. Most of the sub-series rose m/m, but have moved for a year. The future production, orders growth, shipments and employment each rose. The future employment index also rose slightly m/m; it has been steady for the last year. Future wages & benefits ticked higher, continuing the positive trend of the last two years.

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.