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Economy in Brief

Texas Factory Sector Activity Nears Seven-Year High
by Tom Moeller  January 30, 2017

The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the General Business Activity Index surged to 22.1 during January, the strongest reading since March 2010. Most of the survey indicators improved, notably the volume of new orders, their growth rate and shipments volume. Employment also reached the highest level in just over a year, and the workweek reading surged. Another labor indicator, the wages & benefits series, rose to the highest level since September. As for inflation, the prices paid indicator surged to the highest level since April 2011, and prices for raw materials similarly strengthened.

The General Business Activity, Six Months Ahead Index also strengthened, rising to the best level since December 2004. The company outlook measure reached a 12-year high, and the expected business activity measure similarly improved. Expected production remained strong. The volume of new orders, and their expected growth rate rose sharply. Expected delivery times remained slow. Future employment hit the highest level since 2006, and the expected workweek remained high.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase. When all firms report that activity has increased, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase or decrease is equal. Items may not add up to 100% because of rounding. Data for the Texas Manufacturing Outlook can be found in Haver's SURVEYS database.

Texas Manufacturing Outlook Survey (SA, % Balance) Jan Dec Nov Jan'16 2016 2015 2014
Current General Business Activity Index 22.1 17.7 12.5 -35.8 -8.8 -12.5 8.4
   Production 11.9 14.8 9.8 10.0 2.4 -1.0 14.5
   Growth Rate of Orders 6.7 -1.1 1.6 -18.2 -7.3 -11.8 4.7
   Number of Employees 6.1 -3.4 4.5 -5.2 -4.9 -0.4 11.5
   Prices Received for Finished Goods 17.7 16.2 9.5 -10.1 -1.6 -8.5 8.3
General Business Activity Index Expected in Six Months 43.7 42.5 34.2 -25.3 8.9 4.1 17.4
   Production 53.9 54.8 51.9 26.0 35.8 31.1 42.7
   Growth Rate of New Orders 48.4 36.0 42.8 -15.7 24.3 20.7 31.5
   Wages & Benefits 42.5 43.6 41.0 28.0 34.8 33.2 43.1
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