Texas Manufacturing Charges Forward: Is It Time to Get Bullish?
Things are looking up in Texas. Factory activity, as measured by the Federal Reserve Bank of Dallas, increased for the 11th consecutive moth in March, according to a survey of business executives. Every major manufacturing industry indicator showed growth in March, with many reporting acceleration.
The General Business Activity index, one of the broad measures of general business conditions in Texas, increased by 4.6 points to 4.9, making 10 consecutive months of improving optimism among business executives. Moreover, the company outlook index increased 5.7 points to 9.1, also making a 10-month streak. The current employment index increased 5.1 points to 15, but the future employment decreased 2.4 points to 35.1.
The data for Texas is consistent with a national-level pickup recently reported by the U.S. Census Bureau. New orders for manufactured durable goods increased 2.2 percent on the month and 0.2 percent on the year in February to $229.4 billion, beating estimates for a more modest increase of 1 percent. This increase follows two consecutive months of declines in December and January.
Excluding new orders for transportation equipment, which can be subject to seasonal and cyclical volatility, durable goods orders increased 0.2 percent on the month and 1.5 percent on the year. New orders for transportation equipment increased 6.9 percent sequentially to $71.4 billion, or about 31 percent of total spending. Excluding new orders for defense equipment, which are subject to the vagaries of politics, durable goods orders increased 1.8 percent. New orders for defense equipment increased 2.2 percent sequentially and is up 0.8 percent year to date compared to last year.