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Texas Manufacturing Activity Stabilizes in July, Says Dallas Fed Survey

For immediate release: July 25, 2016

DALLASTexas factory activity held steady in July, according to the Federal Reserve Bank of Dallas ’ Texas Manufacturing Outlook Survey.

The production index — a key measure of state manufacturing conditions — came in near zero after two months of negative readings, suggesting output stopped falling this month.

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

Other measures of current manufacturing activity also reflected stabilization, and demand declines abated somewhat. The capacity utilization and shipments indexes posted near-zero readings, up from negative territory in May and June. The new orders index rose six points to –8.0, while the growth rate of orders index rose nine points to –9.7.

Perceptions of broader business conditions were notably less pessimistic in July. While the general business activity index remained negative for a 19th month in a row, it jumped 17 points to –1.3 in July. The company outlook index also remained negative but rose, climbing from –11.0 to –2.3.

Labor market measures indicated slight employment declines and stable workweek length in July. The employment index came in at –2.6, up from a post-recession low of –11.5 last month. The hours worked index pushed up to near zero in July after a reading of –12.8 in June.

Expectations regarding future business conditions improved again in July. The index of future general business activity posted a second positive reading in a row, rising 16 points to 18.4. The index of future company outlook also rose markedly, coming in at 22.8. Other indexes for future manufacturing activity also made double-digit gains in July, pushing further into positive territory.
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:
Justin Jones
Federal Reserve Bank of Dallas
Phone: 214-922-5449
Email: Justin.Jones@dal.frb.org