Texas Manufacturing Activity Continues To Grow

Texas Manufacturing Activity Continues To Grow

Texas factory activity continued to expand in Marc­h, according to business executives responding to the Texas Manufacturing Outlook Survey.

The production index, a key measure of state manufacturing conditions, held fairly steady at 11.5, indicating output growth continued at about the same pace as last month.

Other measures of manufacturing activity also suggested continued expansion in March, although demand growth slowed.

The new orders index fell from 6.9 to 2.4, and the growth rate of orders index slipped into negative territory for the first time since December 2016. The shipments index declined five points to 5.8, while the capacity utilization index moved up four points to 10.9.

Perceptions of broader business conditions continued to improve in March, although outlooks were less optimistic than in February. The general business activity index remained positive but fell five points to 8.3. Similarly, the company outlook index stayed in positive territory but fell from 14.2 to 6.0.

The index measuring uncertainty regarding companies’ outlooks was largely unchanged at a 10-month low of 3.4.

Labor market measures suggested continued employment growth and longer workweeks in March. The employment index held steady at 13.1, a reading well above average.

Twenty-two percent of firms noted net hiring, compared with 9 percent noting net layoffs. The hours worked index came in at 4.6, up slightly from February.

Upward pressure on prices and wages continued in March. The raw materials and finished goods prices indexes held fairly steady at 20.4 and 6.9, respectively.

Twenty-seven percent of firms noted higher input costs this month—about twice the share noting higher selling prices. The wages and benefits index remained elevated at 30.1.

Expectations regarding future business conditions remained positive in March, although the indexes showed mixed movements.

The index of future general business activity inched up two points to 19.7, while the index of future company outlook fell nine points to 17.5. Most other indexes for future manufacturing activity pushed further into positive territory this month.

Historical data are available from June 2004 to the most current release month.

Business Indicators Relating to Facilities and Products in Texas Current (versus previous month)
Indicator Mar Index Feb Index Change Indicator Direction* Trend** (Months) % Reporting Increase % Reporting
No Change
% Reporting Decrease
Production 11.5 10.1 +1.4 Increasing 33 28.8 53.8 17.3
Capacity Utilization 10.9 7.1 +3.8 Increasing 33 26.9 57.1 16.0
New Orders 2.4 6.9 –4.5 Increasing 29 20.7 61.0 18.3
Growth Rate of Orders –1.9 3.4 –5.3 Decreasing 1 17.3 63.5 19.2
Unfilled Orders 0.5 0.7 –0.2 Increasing 3 14.7 71.1 14.2
Shipments 5.8 10.7 –4.9 Increasing 28 24.5 56.8 18.7
Delivery Time 4.1 –1.3 +5.4 Increasing 1 14.3 75.5 10.2
Finished Goods Inventories 1.7 –2.5 +4.2 Increasing 1 17.5 66.7 15.8
Prices Paid for Raw Materials 20.4 21.8 –1.4 Increasing 37 27.1 66.2 6.7
Prices Received for Finished Goods 6.9 5.2 +1.7 Increasing 32 13.6 79.7 6.7
Wages and Benefits 30.1 28.9 +1.2 Increasing 116 32.2 65.7 2.1
Employment 13.1 12.6 +0.5 Increasing 27 22.2 68.7 9.1
Hours Worked 4.6 1.8 +2.8 Increasing 29 18.8 67.0 14.2
Capital Expenditures 12.1 18.7 –6.6 Increasing 31 16.6 78.9 4.5

General Business Conditions Current (versus previous month)
Indicator Mar Index Feb Index Change Indicator Direction* Trend** (Months) % Reporting Increase % Reporting
No Change
% Reporting Decrease
Company Outlook 6.0 14.2 –8.2 Improving 3 19.6 66.8 13.6
General Business Activity 8.3 13.1 –4.8 Improving 3 21.5 65.3 13.2

 



 

Indicator Mar Index Feb Index Change Indicator Direction* Trend** (Months) % Reporting Increase % Reporting
No Change
% Reporting Decrease
Outlook Uncertainty† 3.4 4.1 –0.7 Increasing 10 21.0 61.3 17.6

Business Indicators Relating to Facilities and Products in Texas Future (six months ahead)
Indicator Mar Index Feb Index Change Indicator Direction Trend* (Months) % Reporting Increase % Reporting
No Change
% Reporting Decrease
Production 51.3 44.3 +7.0 Increasing 121 57.6 36.1 6.3
Capacity Utilization 48.2 40.1 +8.1 Increasing 121 53.4 41.4 5.2
New Orders 43.5 44.9 –1.4 Increasing 121 50.2 43.1 6.7
Growth Rate of Orders 32.6 30.8 +1.8 Increasing 121 41.0 50.6 8.4
Unfilled Orders 10.7 10.8 –0.1 Increasing 42 19.2 72.3 8.5
Shipments 45.4 44.7 +0.7 Increasing 121 53.0 39.4 7.6
Delivery Time 9.6 8.7 +0.9 Increasing 28 19.0 71.6 9.4
Finished Goods Inventories 9.1 5.4 +3.7 Increasing 17 19.1 70.9 10.0
Prices Paid for Raw Materials 28.2 23.7 +4.5 Increasing 120 35.5 57.3 7.3
Prices Received for Finished Goods 20.0 25.9 –5.9 Increasing 38 31.8 56.4 11.8
Wages and Benefits 54.4 47.0 +7.4 Increasing 178 54.9 44.6 0.5
Employment 37.9 33.2 +4.7 Increasing 76 43.9 50.1 6.0
Hours Worked 14.4 11.4 +3.0 Increasing 34 24.4 65.6 10.0
Capital Expenditures 36.2 24.0 +12.2 Increasing 112 39.8 56.6 3.6

General Business Conditions Future (six months ahead)
Indicator Mar Index Feb Index Change Indicator Direction* Trend** (Months) % Reporting Increase % Reporting
No Change
% Reporting Worsened
Company Outlook 17.5 26.7 –9.2 Improving 38 30.8 55.9 13.3
General Business Activity 19.7 17.7 +2.0 Improving 34 32.8 54.1 13.1

 

*Indicator direction refers to this month’s index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.

**Number of months moving in current direction.

†Added to survey in January 2019.

Data have been seasonally adjusted as necessary, with the exception of the outlook uncertainty index, which does not yet have a sufficiently long time series to test for seasonality.

Source: Federal Reserve Bank of Dallas


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