Texas Manufacturing Archives - Shopfloor

Texas Manufacturing Activity Stalls in November

By | Economy | One Comment

The Federal Reserve Bank of Dallas said that manufacturing activity “stalled” in November. The composite index of general business activity declined from 1.8 in October to -2.8 in November, suggesting that conditions have worsened in the month. This figure has been negative six of the past eight months. Respondent companies’ outlook also darkened, with that index down from 2.4 to -4.8.

The sample comments provided tend to back up this more-negative view. A paper manufacturer, for instance, noted that “November was expected to have more sales, but sales remained the same. We are still holding out for sales growth in first quarter 2013.” Another individual added, “Demand for our product has really flattened out in the last half of this year.” Uncertainty about the fiscal cliff, health care costs, and taxes were mentioned by a couple people. At the same time, one manufacturer in the woods product sector said, “Even in normal economic times, November and December are challenging months.”

Despite the more pessimistic outlook, some of the subcomponents improved, even as they remained weak. For example, the index for new orders rose from -4.5 to 0.4. Employment also picked up marginally, increasing from 5.2 to 6.7. Nonetheless, several of the key variables suggested slowing activity levels, with decreases in the indices for production, capacity utilization, shipments, finished goods inventories, hours worked, and capital expenditures. It is clear to see why manufacturers in the region have become more downbeat. Read More