April Dallas Fed Manufacturing: Expansion Continues, Weak Outlook

The Dallas Fed has released its Texas Manufacturing Outlook Survey for April. The latest general business activity index came in at 1.1, down 7.6 from last month. All figures are seasonally adjusted.

Here is an excerpt from the latest report:

Texas factory activity expanded at a moderate pace in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, ticked down two points to 10.8, a reading in line with the index’s average.

Expectations regarding future manufacturing activity generally eased but remained positive. The future production index fell from 40.1 to 34.7, and the future general business activity index retreated six points to 1.8. Other measures of future manufacturing activity such as capital expenditures and employment showed mixed movements but remained solidly in 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.