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Texas Manufacturing Activity Increased in September

According to the Dallas Federal Reserve’s September Texas Manufacturing Outlook Survey, this month’s production index grew from 6.8 in August to 17.6 in September. The production index measures the state of manufacturing conditions. September’s rise indicates faster output growth.

The production index wasn’t the only area of significant development.

  • The new orders index increased 5 points to 7.5.
  • The capacity utilization index jumped to 20.2 after falling to 3.6 in August.
  • The shipments index fell to 6.4 in August, but bounced back to 15.9 in September.
Texas Manufacturing System ID

The September Texas Manufacturing Outlook Survey conducted by the Dallas Federal Reserve shows favorable gains in its production index, which measures the state of manufacturing conditions.

The Dallas Fed collected data from 105 Texas manufacturers on September 16-24. Respondents’ perceptions were optimistic this month, as evidenced by a general business activity index of 10.8, which is nearly 4 points over its non-recession average of 7. Expectations for future business conditions also remain positive.

The monthly report includes edited responses from completed surveys, which provide insight into the direction of specific segments. A sampling of feedback follows.

Transportation Equipment Manufacturing

Lower gas prices at the pump have improved our end customer sales, which has increased our production. As long as gas prices stay in the current range of the last two months, sales and production should remain strong.

Fabricated Metal Manufacturing

Wages are escalating rapidly, and welders are impossible to find.

Food Manufacturing

We waited too long to raise our prices, thinking that our raw material costs would come down to more normal levels. They remain at record highs, and we will be raising our prices significantly.

Chemical Manufacturing

Our increased business activity is based on orders placed this time last year. We see some softening, especially in demand from Europe and China, while the U.S. remains strong.

Machinery Manufacturing

We have a positive view of demand from our major customer sectors—midstream and downstream energy companies. The new construction activities along the Gulf Coast will tighten labor markets, which we expect will lead to both higher labor rates and higher pricing.

Plastics and Rubber Products Manufacturing

Our business is between contracts with key customers; therefore, our current lull in sales is not indicative of the economy in general. Our new orders will pick up in six months.

Paper Manufacturing

After a slight slowdown at the end of July and beginning of August, orders are picking up again and we are optimistic for the rest of the year.

Printing and Related Support Activities

Customers have become increasingly price buyers; they’ve commoditized our product offering, and some have had serious trouble with the low price bidder. We’ve had to double down on our efforts to drive out costs and increase the rate of reduction.

To read the full report, which includes a results table, production chart, and historical data, click here.

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Jay Schofield

Product Business Development Manager at System ID Barcode Solutions
Jay Schofield’s passion is numbers. For more than 10 years, he has been turning facts and figures into actionable business intelligence for System ID. When he’s not researching, analyzing, and planning for the “next big thing,” Jay can be spotted on the lake with family and friends.

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