Texas Manufacturing Grows but at a Slower Pace;Business Outlook Less Optimistic, According to Dallas Fed Survey
For immediate release: May 27, 2014
DALLAS—Texas factory activity increased again in May, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
Texas produces more than 11 percent of total manufactured goods in the United States, ranking second behind California in factory production.
The production index—a key measure of state manufacturing conditions—fell from 24.7 to 11, indicating output grew but not as strongly as in April.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
Slower manufacturing activity was reflected in other survey measures as well. The new orders index fell sharply, hitting its lowest level this year. The capacity utilization index also fell but remained slightly above its average level over the history of the survey.
Perceptions of broader business conditions were less optimistic in May. The general business activity index remained elevated but moved down from 11.7 to 8, and the company outlook index decreased to 4.1 after rising sharply in April. Although these indexes fell from last month, both were up strongly from negative readings a year ago.
Labor market indicators reflected a tapering of growth in employment levels and workweek length. The employment index dropped, reaching its lowest reading in nearly a year. The hours worked index fell from 13.9 to 2.8, indicating only a slight increase in workweek length from April.
Expectations regarding future business conditions were a little less optimistic in May. The index of future general business activity and the index of future company outlook fell, but remained positive.
Indexes for future manufacturing activity moved down but remained in solid positive territory.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.
Federal Reserve Bank of Dallas