Global| Apr 27 2020Texas Manufacturing Sector Activity Continues to Decline in April
by:Tom Moeller
|in:Economy in Brief
Summary
• COVID-19 depresses business. • Outlook worsens. The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey for April that the Current General Business Activity Index weakened to a record low of -73.7 from [...]
• COVID-19 depresses business.
• Outlook worsens.
The Federal Reserve Bank of Dallas reported in its Texas Manufacturing Outlook Survey for April that the Current General Business Activity Index weakened to a record low of -73.7 from -70.0 in March. The decline continued to mirror reports of extreme economic weakness by other regional Federal Reserve banks in recent weeks. The figures are diffusion indexes with readings above zero indicating positive growth. The survey dates back to 2004.
The production, shipments, new orders and wages indexes each were increasingly negative this month. The delivery times measure registered the quickest product delivery speeds in over ten years. The employment measure remained below zero with only three percent of respondents reporting an increase in hiring while 24% indicated a decline.
Pricing power weakened sharply during April to the lowest level since May 2009. Only three percent of respondents raised prices while 28% lowered prices.
Readings for expected business conditions in six months were more negative. Indexes roughly equaled their record lows, led by readings below zero for orders, shipments, production and employment. A reading for expected prices is not available in this survey, but expected growth in wages & benefits deteriorated to a record low.
Capital spending plans also fell to a near-record low.
Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When all respondents report rising activity, the index will register 100. The index will register -100 when all respondents report a decrease. The index will be zero when the number of respondents reporting an increase equals the number reporting a decrease. 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) | Apr | Mar | Feb | Apr '19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Current General Business Activity Index | -73.7 | -70.0 | 1.2 | 2.0 | -0.7 | 25.8 | 20.6 |
| Production | -55.3 | -35.3 | 16.4 | 12.4 | 9.0 | 21.4 | 20.2 |
| Growth Rate of New Orders | -62.2 | -44.9 | 3.6 | 5.2 | -0.8 | 14.8 | 11.4 |
| Employment | -21.2 | -23.0 | -0.9 | 4.6 | 9.4 | 20.0 | 11.4 |
| Wages & Benefits | -2.7 | 5.5 | 22.6 | 28.2 | 24.0 | 29.7 | 22.2 |
| Prices Received for Finished Goods | -24.6 | -9.2 | -0.1 | 6.0 | 2.4 | 17.6 | 12.7 |
| General Business Activity Index Expected in Six Months | -42.1 | -39.5 | 18.0 | 18.4 | 7.2 | 31.6 | 34.5 |
| Production | -13.1 | -18.7 | 35.0 | 41.3 | 36.1 | 48.5 | 46.8 |
| Growth Rate of New Orders | -16.1 | -20.7 | 30.0 | 27.5 | 25.6 | 35.9 | 37.7 |
| Employment | -7.1 | -16.7 | 20.4 | 33.4 | 26.7 | 37.6 | -35.2 |
| Wages & Benefits | -0.6 | 0.7 | 39.7 | 38.8s | 39.9 | 50.4 | 43.4 |
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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