For immediate release: December 31, 2007
Texas Factory Activity Softens in December, Dallas Fed Survey Finds
DALLAS—Texas manufacturing continued to soften in December, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
Texas produces more than 8 percent of the total manufactured goods in the United States, ranking second behind California in factory production.
Nearly all current production and general business conditions indicators fell further into negative territory, continuing a decline that began in early spring.
“It’s important to note that the indexes are not seasonally adjusted, and there appears to be a pattern of December weakness over the past two years,” said economist Fiona Sigalla.
Additionally, as part of the December survey, participants responded to supplemental questions about credit conditions. When asked whether recent market conditions had affected their firms’ ability to obtain credit, 14 percent responded “somewhat” but none reported a “significant” effect. Twenty-nine percent hadn’t sought credit.
The survey also found that upward wage and price pressures persist, and producers continue to report more price pressures on raw materials than finished goods.
Several indexes—including production, capacity utilization and volume of shipments—were all negative and fell to their lowest points since the survey began in May 2004. The index for volume of new orders remained negative but improved slightly, rising from –10.6 in November to –7.9. However, indexes for these indicators six months from now are positive and strengthened in December.
The labor market continued to weaken with the number of employees and average workweek indexes both falling further into negative territory.
The company outlook and general business conditions indexes also both fell.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.
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