Texas Manufacturing Continues to Expand, but Pace Slows
For Immediate Release: October 29, 2018
DALLAS—Texas factory activity continued to expand in October, albeit at a slower pace, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
The October report also includes results to special questions on credit and borrowing conditions.
The production index, a key measure of state manufacturing conditions, was positive but declined another six points to 17.6, indicating output growth continued to abate.
Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.
“This was a positive report for Texas manufacturing, although it did show another month of easing in the pace of growth. However, outlooks improved further, and several contacts noted that uncertainty declined,” said Emily Kerr, Dallas Fed senior business economist.
“Price indexes escalated further this month, with the raw materials prices index reaching its highest level in seven years and several manufacturers pointing to tariffs being part of what’s driving up those material costs.”
Here are some additional key takeaways from this month’s manufacturing report:
Perceptions of broader business conditions improved this month. The general business activity index inched up to 29.4, and the company outlook index climbed seven points to 25.0. Fewer than 3 percent of firms noted that their outlook worsened, the lowest share since 2004.
Labor market measures suggested rising employment levels and longer workweeks in October. The employment index rose six points to 23.9, a level well above average. Twenty-eight percent of firms noted net hiring, compared with 4 percent noting net layoffs. The hours worked index remained positive but moved down to 6.5.
Expectations regarding future business conditions remained positive in October. The indexes of future general business activity and future company outlook remained well above average and came in at 35.6 and 37.3, respectively.
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
Phone: (214) 922-6748