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Economy in Brief

Texas Factory Sector Growth Strengthens
by Tom Moeller  September 25, 2017

The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the September General Business Activity Index rose to 21.3 from 17.0 in August. The index was at the highest point since February. The shipments index strengthened to the highest level of the economic expansion and the unfilled orders index also rose. The delivery time index suggested the slowest rate of product delivery in six months. The employment index rose to the highest level since April 2014 and the employee workweek also lengthened. Capital expenditures remained strong. Offsetting these positive indications was the growth rate of new orders which eased slightly while the production index also slipped.

On the pricing front, the index of prices paid for finished goods rose to the highest level since February. Raw materials pricing strengthened as well. As for labor pricing, the wages & benefits index eased but remained up sharply from the lows early last year.

The index for general business activity in six months rose to the highest level since March. Expected new orders and production improved slightly. Expectations for employment and the length of the average workweek gained, but expected wages & benefits weakened. The expected delivery times index also declined sharply.         

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) Sep Aug Jul Sep'16 2016 2015 2014
Current General Business Activity Index 21.3 17.0 16.8 -2.1 -8.8 -12.5 8.4
   Production 19.5 20.3 22.8 17.6 2.4 -1.0 14.5
   Growth Rate of Orders 9.7 11.7 12.2 -3.4 -7.3 -11.8 4.7
   Number of Employees 16.3 9.9 11.2  1.9 -4.9 -0.4 11.5
   Prices Received for Finished Goods  17.5 10.2 5.6 0.7 -1.6 -8.5 8.3
General Business Activity Index Expected in Six Months 34.5 29.2 31.6 11.1 8.9 4.1 17.4
   Production 46.5 43.1 48.8 31.4 35.8 31.1 42.7
   Growth Rate of New Orders 35.8 37.1 32.8 19.7 24.3 20.7 31.5
   Number of Employees 41.3 30.8 36.2 14.8 16.7 14.7 28.6
   Wages & Benefits 39.8 44.3 45.9 31.9 34.8 33.2 43.1
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