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For immediate release: August 27, 2007

Texas Manufacturing Rebounds in August, Survey Finds

DALLAS—Texas factory activity bounced back in August after unusually wet weather contributed to weak factory activity in July, according to the Federal Reserve Bank of Dallas' Texas Manufacturing Outlook Survey.

Texas produces more than 8 percent of the total manufactured goods in the United States, ranking second behind California in factory production.

After falling into negative territory in July, indexes for production, capacity utilization, volume of new orders and volume of shipments strengthened significantly to near May 2007 levels.

The production index rose from –9.7 to 21.6, with a third of factories reporting an increase. Capacity utilization rebounded from –11.5 to 19.1. More than 40 percent of firms said the volume of shipments increased in August, pushing that index from –8 to 27. Thirty-two percent said the volume of new orders increased, boosting that index from –15.9 to 14.4.

"The strong rebound this month suggests last month's dip was weather-related," said Dallas Fed economist Fiona Sigalla.

The labor market also showed slight improvement. After falling to –16 in July, the index for average employee workweek returned to positive territory this month, rising to 0.9.

Texas manufacturers remain cautious about general business conditions, according to the survey. The index for the current level of general business activity remained negative but inched up from –3.6 to –1.8.

Additionally, upward price pressures continued to recede.

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


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