March 2019 Texas Manufacturing Survey Little Changed

Of the three Federal Reserve districts which have released their March manufacturing surveys - all were in expansion but their growth rates were generally slowing or somewhat unchanged. A complete summary follows. 

Analyst Opinion of Dallas Fed Manufacturing Survey

This survey remains in positive territory with subindices new orders again declining and unfilled orders marginally declining with both in expansion. Even though there was a marginal improvement in the general index, this report should be considered somewhat worse than last month because of the decline of the key subindices.

The expectations from Econoday was +5.0 to 13.5 (consensus +10.0) for the general activity index, and the reported value was 11.5. From the Dallas Fed:

Texas factory activity continued to expand in Marc­h, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held fairly steady at 11.5, indicating output growth continued at about the same pace as last month.

Other measures of manufacturing activity also suggested continued expansion in March, although demand growth slowed. The new orders index fell from 6.9 to 2.4, and the growth rate of orders index slipped into negative territory for the first time since December 2016. The shipments index declined five points to 5.8, while the capacity utilization index moved up four points to 10.9.

Perceptions of broader business conditions continued to improve in March, although outlooks were less optimistic than in February. The general business activity index remained positive but fell five points to 8.3. Similarly, the company outlook index stayed in positive territory but fell from 14.2 to 6.0. The index measuring uncertainty regarding companies' outlooks was largely unchanged at a 10-month low of 3.4.

Labor market measures suggested continued employment growth and longer workweeks in March. The employment index held steady at 13.1, a reading well above average. Twenty-two percent of firms noted net hiring, compared with 9 percent noting net layoffs. The hours worked index came in at 4.6, up slightly from February.

Upward pressure on prices and wages continued in March. The raw materials and finished goods prices indexes held fairly steady at 20.4 and 6.9, respectively. Twenty-seven percent of firms noted higher input costs this month—about twice the share noting higher selling prices. The wages and benefits index remained elevated at 30.1.

Expectations regarding future business conditions remained positive in March, although the indexes showed mixed movements. The index of future general business activity inched up two points to 19.7, while the index of future company outlook fell nine points to 17.5. Most other indexes for future manufacturing activity pushed further into positive territory this month.

Dallas Fed (hyperlink to reports):

Source: Dallas Fed

Summary of all Federal Reserve Districts Manufacturing:

Richmond Fed (hyperlink to reports):

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Kansas Fed (hyperlink to reports):

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Philly Fed (hyperlink to reports):

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New York Fed (hyperlink to reports):

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Federal Reserve Industrial Production - Actual Data (hyperlink to report):

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Holding this and other survey's Econintersect follows accountable for their predictions, the following graph compares the hard data from Industrial Products manufacturing subindex (dark blue bar) and US Census manufacturing shipments (lighter blue bar) to the Dallas Fed survey (light blue bar).

Comparing Surveys to Hard Data:

In the above graphic, hard data is the long bars, and surveys are the short bars. The arrows on the left side are the key to growth or contraction.