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Texas Manufacturing Activity Rises Again, but Outlook Worsens in December, Says Dallas Fed Survey

For immediate release: December 28, 2015

DALLAS—Texas factory activity increased for a third month in row in December, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

The production index—a key measure of state manufacturing conditions—rose from 5.2 to 13.4, indicating stronger growth in output.

Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.

Some other indexes of current manufacturing activity also reflected growth in December, but the survey’s demand measures showed continued weakness. The new orders and growth rate of orders indexes pushed further into negative territory, while the shipments and capacity utilization indexes posted their fourth positive readings in a row.

Perceptions of broader business conditions weakened markedly in December. The general business activity index remained negative, plunging to –20.1. The company outlook index fell 10 points to –9.7, its lowest level since August.

Labor market indicators reflected a notable rise in December. The employment index inched up further to 12.8. The hours worked index rose to 15.2, its highest level since May 2010.

Expectations regarding future business conditions were mixed in December. The index of future general business activity fell into negative territory, while the index of future company outlook fell but remained positive. Indexes for future manufacturing activity declined but remained strongly positive.

For this month’s Texas Manufacturing Outlook Survey, respondents were also asked supplemental questions on the effect of the dollar exchange rates and how exports are impacting the outlook of their company.

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.

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Media contact:
James Hoard
Federal Reserve Bank of Dallas
Phone: 214-922-5307
Email: James.Hoard@dal.frb.org