Texas Manufacturing Outlook Survey – Dallasfed.org
February 27, 2017
Growth in Texas Manufacturing Activity Continues
What’s New This Month
For this month’s survey, Texas business executives were asked supplemental questions on employment expectations and the labor market. Results for these questions from the Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS) and Texas Retail Outlook Survey (TROS) have been released together. Read Special Questions results.
Texas factory activity increased for the eighth consecutive month in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose five points to 16.7, suggesting output growth picked up pace this month.
Other measures of current manufacturing activity also indicated expansion. The new orders and growth rate of orders indexes fell but remained positive, coming in at 11.6 and 2.0, respectively. The shipments index also moved down but stayed positive, posting a reading of 12.2 in February. The capacity utilization index rose from 9.1 to 14.7 this month.
Perceptions of broader business conditions improved again in February. The general business activity index returned to positive territory in October 2016 and has pushed further positive every month since, reaching 24.5 this month. The company outlook index posted a sixth consecutive reading above zero this month, but slipped slightly to 17.6.
Labor market measures indicated employment gains and longer workweeks. The employment index posted a second positive reading in a row—something that hasn’t happened since the end of 2015—and edged up from 6.1 to 9.6. Nineteen percent of firms noted net hiring, compared with 10 percent noting net layoffs. The hours worked index was largely steady at 7.7.
Upward price pressures remained strong in February, and wages continued to rise. The raw materials price index was unchanged at 31.5, and the finished goods prices index rose slightly to 19.5, reaching its highest level since 2011. The wages and benefits index held fairly steady at 19.5.
Expectations regarding future business conditions generally improved this month. The indexes of future general business activity and future company outlook came in at 37.0 and 35.6, respectively—down from their January readings but still solidly in positive territory. Most other indexes for future manufacturing activity also slipped but remained positive.
Next release: Monday, March 27