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Texas Manufacturing Activity Holds Steady, Outlooks Deteriorate in August, Says Dallas Fed Survey

For immediate release: August 31, 2015

DALLAS—Texas factory activity was essentially flat in August, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

The production index—a key measure of state manufacturing conditions—climbed to near zero at –0.8, suggesting output held steady after five months of declines.

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

Other measures of current manufacturing activity showed mixed movements in August. The capacity utilization index rose to zero after several months in negative territory and the shipments index edged up. The new orders index, however, plunged after rebounding to positive territory last month.

Perceptions of broader economic conditions deteriorated markedly in August. The general business activity and company outlook indexes both posted double-digit declines. The general business activity index dropped from –4.6 to –15.8, while the company outlook index declined to –10.3.

Measures of future business conditions also deteriorated notably in August. The indexes of future general business activity and future company outlook both posted double-digit declines but remained slightly positive. Indexes for future manufacturing activity fell but also remained in positive territory.

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

For this month’s Texas Business Outlook Surveys, respondents were asked supplemental questions on employment expectations and the labor market in Texas.

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