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For immediate release: October 30, 2006

Dallas Fed Reports Factory Activity Continuing to Expand in October While Cooling Slightly

DALLAS—Manufacturing activity in Texas continued to expand in October although the growth rate has cooled, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

Though still positive, the survey’s production index was 8.4 in October, compared with 11.1 in September. Readings above zero denote expansion, while negative levels indicate contraction.

“While manufacturing growth continues to slow, there is still a lot of underlying strength with more responding factories reporting an increase in production during October,” said Dallas Fed economist Fiona Sigalla.

The survey found that manufacturers were more optimistic about their companies’ operations than the rest of the economy. Sentiment on general business activity was slightly negative in October. Most firms, however, expect increases in production and the volume of new orders and shipments six months from now.

Last year, Texas produced almost 9 percent of the total manufactured goods in the United States. Texas ranks second behind California in factory production and first as an exporter of manufactured products.
Texas turns out a large share of U.S. production of petroleum and coal products. The state also has nearly 10 percent of the nation’s output of computer and electronics products and nonmetallic mineral products, such as brick, glass and cement.

The Eleventh Federal Reserve District’s share of national manufacturing output is the most rapidly growing in the nation.

The Dallas Fed conducts the survey monthly to obtain a timely assessment of the state’s factory activity.

For further information on the Texas Manufacturing Outlook Survey, visit the Dallas Fed web site at


Media contact:
James Hoard
Phone: (214) 922-5307