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January 2007
Factory Activity Strengthens
Texas Manufacturing:
A Primer
The Texas Manufacturing Outlook Survey takes the pulse of an important segment of the nation's industrial sector. The state produced $139.7 billion worth of manufactured goods in 2006, 8.7 percent of the U.S. total. Texas ranks second behind California in factory production and first as an exporter of manufactured products.
According to 2005 estimates, Texas turns out 19 percent of U.S. petroleum and coal products and nearly 15 percent of chemical products. The state also produces just over 13 percent of the nation's output of computer and electronics products, nearly 10 percent machinery, and 10 percent nonmetallic mineral products, such as brick, glass and cement. |
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Manufacturing activity strengthened
in January, according to the Texas Manufacturing Outlook
Survey. Most indexes turned positive after falling into
negative territory in December. After drifting lower
during the fall of 2006, most indexes have now rebounded
to the levels posted in late summer 2006.
The production index increased
to 13.8 in January from 
in December. Sentiment on general business activity
increased to 4.7 from –8.8 last month. The percentage
of firms reporting improved conditions increased from
last month, and a smaller percentage of firms said their
evaluation of general business activity had worsened.
Manufacturers remain optimistic
about future business activity, although most of those
indicators were slightly lower than last month. Over
half of responding firms expect increases in production,
capacity utilization, shipments and volume of new orders
six months from now.
In the January survey, the indexes
for production, capacity
utilization, volume of
shipments, new orders
and growth rate of orders
turned positive after falling negative last month. The
index for unfilled orders
increased to zero. The indexes for materials
and finished goods inventories
remained positive and rose slightly. The index for number
of employees turned positive from zero, but the
average employee workweek
fell further from December’s negative reading.
The wages and benefits,
raw materials and finished
goods price indexes were positive and increased.
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.
Click on links in the table for
greater details, including historical data .
| Questions
regarding the Texas Manufacturing Outlook
Survey can be addressed to Fiona Sigalla at
Fiona.Sigalla@dal.frb.org
or 214-922-5166.
Note
The Texas Manufacturing
Outlook Survey does not yet have a sufficiently
large sample size to permit seasonal adjustment
of the indexes. Thus, while respondents
are asked to adjust for normal seasonal
variation, the month-to-month values of
these indexes may include some normal seasonal
variation that is not indicative of changes
in the business cycle. Other Federal Reserve
Bank business outlook indexes benefit from
seasonal adjustment, and the Texas indexes
will be seasonally adjusted when a sufficient
series is available. |
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