Dallas Fed Manufacturing: Growth Decelerates in June

The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for June. The latest general business activity index came in at -17.7, down 10.4 from last month. All figures are seasonally adjusted.

Here is an excerpt from the latest report:

Growth in Texas factory activity decelerated sharply in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 18.8 to 2.3, reaching its lowest reading since May 2020.

Expectations regarding future manufacturing were notably less optimistic than in May. The future production index remained only slightly positive, retreating from 19.9 to 4.0. The future general business activity index pushed further into negative territory, falling 20 points to -26.0. Other measures of future manufacturing activity also declined, though most remained positive.

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.