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Manufacturing Growth Slows but Outlook Improves, According to Dallas Fed Survey

For immediate release: December 30, 2013

Texas produces more than 11 percent of total manufacturing goods in the United States, ranking second behind California in factory production.

The production index — a key measure of state manufacturing conditions — fell from 16.9 to 7.1, indicating output grew at a slower pace than in November.

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

Other measures of current manufacturing activity reflected slower or no growth. The new orders index came in near zero, suggesting demand was largely unchanged from November after seven months of increases.

The shipments index also fell to around zero, and the capacity utilization index declined 8 points to 8.6.

Perceptions of broader business conditions were more optimistic in December. The general business activity index posted its seventh consecutive positive reading and edged up to 3.1.

Labor market indicators reflected increased hiring but slightly shorter workweeks.

Upward pressure on prices and wages picked up in December. The raw materials price index rose 10 points to 32.8, with a third of firms noting an increase in input costs.

Expectations regarding future business conditions were notably more optimistic in December. The index of future general business activity spiked 16 points to 22.8, reaching its highest reading in nearly three years. The index of future company outlook rose to 24.1, a 21-month high.

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
Federal Reserve Bank of Dallas
Phone: 214-922-5307