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
Data were collected Feb. 14–22, and 115 Texas manufacturers responded to the survey. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month. Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary. |
Click on links in the table for greater details. Historical data are available from June 2004 to the most current release month.
| Business Indicators Relating to Facilities and Products in Texas Current (versus previous month) | ||||||||
| Indicator | Feb Index | Jan Index | Change | Indicator Direction* | Trend** (Months) | % Reporting Increase | % Reporting No Change | % Reporting Decrease |
16.7 | 11.9 | +4.8 | Increasing | 8 | 31.5 | 53.7 | 14.8 | |
14.7 | 9.1 | +5.6 | Increasing | 8 | 28.5 | 57.7 | 13.8 | |
11.6 | 15.7 | –4.1 | Increasing | 4 | 28.8 | 54.0 | 17.2 | |
2.0 | 6.7 | –4.7 | Increasing | 2 | 20.5 | 61.0 | 18.5 | |
0.7 | 5.2 | –4.5 | Increasing | 2 | 15.8 | 69.1 | 15.1 | |
12.2 | 15.8 | –3.6 | Increasing | 3 | 29.1 | 54.0 | 16.9 | |
5.8 | –5.4 | +11.2 | Increasing | 1 | 13.7 | 78.4 | 7.9 | |
9.7 | –5.3 | +15.0 | Increasing | 1 | 23.6 | 62.5 | 13.9 | |
–2.6 | –8.8 | +6.2 | Decreasing | 4 | 12.3 | 72.8 | 14.9 | |
31.5 | 30.8 | +0.7 | Increasing | 12 | 35.8 | 59.9 | 4.3 | |
19.5 | 17.7 | +1.8 | Increasing | 7 | 24.8 | 69.9 | 5.3 | |
19.5 | 20.8 | –1.3 | Increasing | 87 | 21.7 | 76.1 | 2.2 | |
9.6 | 6.1 | +3.5 | Increasing | 2 | 19.1 | 71.4 | 9.5 | |
7.7 | 9.1 | –1.4 | Increasing | 4 | 18.3 | 71.1 | 10.6 | |
14.4 | 16.3 | –1.9 | Increasing | 6 | 19.4 | 75.6 | 5.0 | |
| General Business Conditions Current (versus previous month) | ||||||||
| Indicator | Index | Jan Index | Change | Indicator Direction* | Trend** (Months) | % Reporting Improved | % Reporting No Change | % Reporting Worsened |
17.6 | 25.0 | –7.4 | Improving | 6 | 29.2 | 59.2 | 11.6 | |
24.5 | 22.1 | +2.4 | Improving | 5 | 33.2 | 58.1 | 8.7 | |
| Business Indicators Relating to Facilities and Products in Texas Future (six months ahead) | ||||||||
| Indicator | Feb Index | Jan Index | Change | Indicator Direction* | Trend** (Months) | % Reporting Increase | % Reporting No Change | % Reporting Decrease |
46.4 | 53.9 | –7.5 | Increasing | 96 | 54.3 | 37.8 | 7.9 | |
45.2 | 49.9 | –4.7 | Increasing | 96 | 54.4 | 36.4 | 9.2 | |
51.0 | 55.2 | –4.2 | Increasing | 96 | 57.2 | 36.6 | 6.2 | |
39.9 | 48.4 | –8.5 | Increasing | 96 | 46.6 | 46.8 | 6.7 | |
11.3 | 16.6 | –5.3 | Increasing | 17 | 21.9 | 67.5 | 10.6 | |
42.8 | 51.8 | –9.0 | Increasing | 96 | 50.2 | 42.4 | 7.4 | |
6.1 | 4.4 | +1.7 | Increasing | 3 | 13.1 | 79.9 | 7.0 | |
6.2 | 3.7 | +2.5 | Increasing | 3 | 21.4 | 63.4 | 15.2 | |
4.6 | 13.7 | –9.1 | Increasing | 8 | 19.1 | 66.4 | 14.5 | |
36.4 | 38.7 | –2.3 | Increasing | 95 | 40.9 | 54.5 | 4.5 | |
31.5 | 32.8 | –1.3 | Increasing | 13 | 36.0 | 59.5 | 4.5 | |
45.0 | 42.5 | +2.5 | Increasing | 153 | 45.9 | 53.2 | 0.9 | |
38.9 | 37.7 | +1.2 | Increasing | 51 | 46.5 | 45.8 | 7.6 | |
12.2 | 14.3 | –2.1 | Increasing | 9 | 20.5 | 71.2 | 8.3 | |
33.0 | 26.6 | +6.4 | Increasing | 87 | 35.8 | 61.5 | 2.8 | |
| General Business Conditions Future (six months ahead) | ||||||||
| Indicator | Index | Jan Index | Change | Indicator Direction* | Trend** (Months) | % Reporting Increase | % Reporting No Change | % Reporting Worsened |
35.6 | 48.8 | –13.2 | Improving | 13 | 44.0 | 47.5 | 8.4 | |
37.0 | 43.7 | –6.7 | Improving | 9 | 45.5 | 45.9 | 8.5 | |
*Indicator direction refers to this month's index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.
**Number of months moving in current direction.
Data have been seasonally adjusted as necessary.