Dallas Fed: Texas Manufacturing Back in Negative Territory


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- Following November's rebound, Texas factory activity 
was back in negative territory in December, plunging by 24 points to match a 
yearly low last seen in September, the Texas Manufacturing Outlook Survey 
published by the Dallas Federal Reserve Bank said Monday (12/29).

   The survey's production index, a key measure of state manufacturing 
conditions, stood at -3.2 for the current month, versus its prior monthly 
reading of 20.5.

   Further details of the survey showed the capacity utilization index also 
declined by 24 points to -4.5, while the new orders index ticked down by 11 
points to -6.4.

   The sector employment index, an indicator of the Texan labor market, 
declined by 2.3 points to -1.1, indicating flat headcounts. The hours worked 
index dropped by 17 points to -7.5, suggesting shorter workweeks for December.

   The general business activity index, meanwhile, fell to -10.9, its lowest 
level since August. While the index has frequently dipped into negative 
territory without a full economic recession, a sustained reading below -15 to 
-20 often aligns with broader downturns or industrial recessions.

   The future production index indicated optimism for the months ahead, 
remaining at the November survey reading of 34.2. The future general business 
activity index also held steady at 10.8.

   Industry representatives offered a variety of opinions, with some expressing 
frustration about the trend in recent months even as they remained hopeful 
about the future.

   The trucking industry, an indicator of diesel demand, appeared to be in an 
especially dour period, with a growth forecast that remains very weak and 
unlikely to change until the third quarter of 2026, said a representative for 
the manufacture of transportation equipment.

   "We are taking additional cost reductions with reduced work weeks and 
reductions and delays in merit increases and holding off filling open 
positions," the representative added.

    

    

    




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