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Economy in Brief

Texas Factory Index Backpedals
by Tom Moeller  November 27, 2017

The Federal Reserve Bank of Dallas indicated in its Texas Manufacturing Outlook Survey that the November General Business Activity Index fell to 19.4, the lowest point in three months. Despite the decline, the figure still suggested firm growth in the factory sector. The production index declined to the lowest level since June but growth in new orders strengthened. The shipments and the inventories measures both fell. The jobs index weakened to the lowest level since January and the workweek series also fell.

Finished goods prices received held steady m/m and remained solid, mirroring the raw material prices measure. Both were up sharply versus earlier lows. The wages & benefits measure plummeted versus its August high to the lowest level since July of last year.

The index of expected business conditions in six months improved to the highest level since the beginning of the year. Expected new orders improved and expected production remained firm. Working the other way, the future employment index fell after moving sideways all year. The measure of expected wages & benefits increased to the highest level since March 2014.

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) Nov Oct Sep Nov'16 2016 2015 2014
Current General Business Activity Index 19.4 27.6 21.3 12.5 -8.8 -12.5 8.4
   Production 15.1 25.6 19.5 9.8 2.4 -1.0 14.5
   Growth Rate of New Orders 18.1 12.3 9.7 1.6 -7.3 -11.8 4.7
   Number of Employees 6.3 16.7 16.3 4.5 -4.9 -0.4 11.5
   Wages & Benefits 14.2 22.5 26.4 19.5 17.6 16.5 22.9
   Prices Received for Finished Goods 15.1 15.3 17.5 9.5 -1.6 -8.5 8.3
General Business Activity Index Expected in Six Months 39.0 38.5 34.5 34.2 8.9 4.1 17.4
   Production 46.1 46.0 46.5 51.9 35.8 31.1 42.7
   Growth Rate of New Orders 40.9 36.7 35.8 42.8 24.3 20.7 31.5
   Number of Employees 29.8 34.2 41.3 30.6 16.7 14.7 28.6
   Wages & Benefits 46.6 36.9 39.8 41.0 34.8 33.2 43.1
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