Skip to main content
News Releases

Texas manufacturing activity rebounds in April, says Dallas Fed survey

For Immediate Release: April 30, 2018

DALLAS—Texas factory activity rebounded strongly in April after posting slower growth in March, 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 25.3.

This month, business executives were asked special questions on a range of topics, covering tax reform, tariffs and linkages to the energy industry. Responses revealed:

  • Nearly 60 percent of firms expect tax reform will reduce their tax bill, with roughly a quarter expecting the reduction to be significant.
  • Nearly 44 percent of firms have taken action not otherwise planned in response to tax reform. Among those that did act, the most common responses were increasing capital expenditures and increasing employee wages.
  • More than a third of firms reported a negative net impact from the newly announced tariffs and other potential changes to trade policy, with roughly 5 percent reporting a positive net impact. Among manufacturers, more than half reported a negative net impact and roughly 9 percent noted a positive one.

Here are some key takeaways from this month’s report:

Other measures of manufacturing activity rose sharply. The new orders and growth rate of orders indexes jumped to their highest readings this year, 27.9 and 18.9, respectively. The capacity utilization index climbed eight points to 18.7, and the shipments index rose nine points to 19.3.

Perceptions of broader business conditions remained highly positive. The general business activity index was largely unchanged at 21.8, and the company outlook index edged up four points to 23.6. Both indexes remained far above their average levels.

Labor market measures suggested stronger growth. The employment index came in at 17.8, up six points from March. The hours worked index moved up four points to 14.3.

Price and wage pressures remained elevated. The raw materials prices index ticked up to 46.3, its highest reading in seven years, while the finished goods prices index edged down to 17.0. The wages and benefits index rose five points to 29.3.

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.

-30-

Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
E-mail: jennifer.chamberlain@dal.frb.org