Dallas Fed Manufacturing Outlook: Continued Expansion in June
This morning the Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for June. The latest general business activity index came in at 36.5, up from 26.8 in May. All figures are seasonally adjusted.
Here is an excerpt from the latest report:
The expansion in Texas factory activity continued in June, albeit at a slower pace than in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, declined 12 points to 23.3, signaling a deceleration in output growth.
Perceptions of broader business conditions were even more positive in June than in May. The general business activity index rose 10 points to 36.5, and the company outlook index rose five points to 33.2, its highest reading since 2006.
Expectations regarding future business conditions remained largely optimistic in June. The indexes of future general business activity and future company outlook moved up to 35.9 and 38.7, respectively, with both readings significantly above average. Other indexes of future manufacturing activity showed mixed movements but remained in solidly positive territory.
Monthly data for this indicator only dates back to 2004, so it is difficult to see the full potential of this indicator without several business cycles of data. Nevertheless, it is an interesting and important regional manufacturing indicator. The Dallas Fed on the TMOS importance:
Texas is important to the nation’s manufacturing output. The state produced $159 billion in manufactured goods in 2008, roughly 9.5 percent of the country’s manufacturing output. Texas ranks second behind California in factory production and first as an exporter of manufactured goods.
Texas turns out a large share of the country’s production of petroleum and coal products, reflecting the significance of the region’s refining industry. Texas also produces over 10 percent of the nation’s computer and electronics products and nonmetallic mineral products, such as brick, glass and cement.