Texas Manufacturing Activity Increased for Second Straight Month in November, Says Dallas Fed Survey
DALLAS—Texas factory activity increased for a second month in a row in November after showing weakness in the first three quarters, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
The production index—a key measure of state manufacturing conditions—edged up to 5.2.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
“We seem to be seeing a budding recovery in Texas manufacturing, as output rose again this month and contacts’ outlooks stabilized,” said Emily Kerr, Federal Reserve Bank of Dallas business economist. “A bright spot in the survey was the employment index, which shot up to its highest reading in more than a year. Although weakness continues for new orders, the index was less negative this month than in the past few months.”
The new orders and growth rate of orders indexes stabilized somewhat but remained in negative territory, while the shipments and capacity utilization indexes declined slightly but remained positive.
Perceptions of broader business conditions were mixed in November. The general business activity index was negative again but less so, rising nearly 8 points to –4.9. The company outlook index pushed up to near zero at 0.8 after three months in negative territory.
Labor market indicators reflected a notable rise in November. The employment index posted a double-digit increase to 11.6, its highest reading since August 2014. The hours worked index also rose sharply to a high not seen in more than a year.
Expectations regarding future business conditions increased in November, with both the index of future general business activity and the index of future company outlook rising further into positive territory. Indexes for future manufacturing activity showed mixed movements but remained strongly positive.
Texas produces more than 11 percent of total manufactured goods in the United States, ranking second behind California in factory production.
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