Texas manufacturing activity strengthens, outlooks improve in July, says Dallas Fed survey
For Immediate Release: July 31, 2017
DALLAS—Texas factory activity increased again in July, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
The production index—a key measure of state manufacturing conditions—rose 11 points to 22.8, indicating output grew at a faster pace than in June.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
“While we saw a deceleration of growth in Texas manufacturing last month, the July data suggest the sector has bounced back to more robust growth,” said Emily Kerr, Dallas Fed senior business economist. “We’ve heard from some energy-related manufacturers that oil price volatility in recent months has hampered orders, but overall, Texas manufacturing continues to expand, and outlooks were more optimistic this month than they have been in over seven years.”
Other measures of current manufacturing activity also indicated a pickup in growth. The new orders and the growth rate of orders indexes rose several points each, coming in at 16.1 and 12.2, respectively. The capacity utilization index moved up to 18.1, and the shipments index increased three points to 11.6.
Perceptions of broader business conditions improved again in July, with a sharp pickup in outlooks. The general business activity index edged up to 16.8. The company outlook index jumped 15 points to 25.9, reaching its highest level since 2010.
Labor market measures indicated slightly stronger employment gains and longer workweeks in July. The employment index edged up to 11.2, its highest reading since the end of 2015. The hours worked index ticked up to 9.8.
Expectations regarding future business conditions continued to reflect optimism. The indexes of future general business activity and future company outlook held steady at 31.6 and 34.8, respectively. Other indexes of future manufacturing activity showed mixed movements but remained solidly in 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:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org