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For immediate release: December 27, 2011

Dallas Fed: Texas Manufacturing Activity Edges Down in December

DALLASTexas factory activity weakened slightly in December, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

Texas produces more than 9.5 percent of total manufactured goods in the United States, ranking second behind California in factory production.

The production index—a key measure of state manufacturing conditions—posted a negative reading for the second month in a row but moved up from –5.1 to –1.3, suggesting a slowing of the pace of decline.

Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.

Other measures of current manufacturing conditions indicated flat activity in December. The new orders index suggested stagnant demand, and the shipments index continued to suggest flat shipment volumes.

Perceptions of broader economic conditions were mixed in December. The general business activity index dipped into negative territory after two consecutive positive readings. The company outlook index remained positive, and nearly 90 percent of manufacturers said their outlooks were unchanged or improved from last month.

Input prices and wages continued to increase in December, while selling prices declined. Forty-three percent of respondents anticipate further increases in raw materials prices over the next six months, while 31 percent expect higher finished goods prices.

Expectations regarding future business conditions were largely unchanged in December, and all indexes remained in solid positive territory.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.


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