Texas, Midwest Factory Reports Show Mixed Results

May 28, 2013
Texas factory activity up sharply in May, but Midwest manufacturing took a hit in April.

Factory production rose in Texas in May, as the Dallas Fed’s manufacturing outlook survey showed an increase from  -0.5 in April to 11.2. However, the Chicago Fed’s report on Midwest manufacturing found activity had decreased 0.5% in April.

Along with stronger production, the Texas survey found that new orders rebounded to 6.2 after falling to -4.9 in April and capacity utilization jumped from 2.7 last month to 6.4.

Despite the positive data, manufacturers’ perceptions of broader business conditions remained negative. The general business activity index stayed negative but moved up five points to -10.5. The company outlook index declined from -2.2 to -6.8, the Dallas Fed reported, reaching its lowest level since July 2010.

Reinforcing preliminary national data from BLS that manufacturing hiring had come to a halt in April, the Texas survey showed the employment index fell to -6.3, the first negative reading in 2013, and the hours worked index showed the workweek had shrunk.The wages and benefits index decreased to 14, with the bank reporting that the great majority of manufacturers continued to show no change in compensation costs.

The raw materials price index increased to 6.4 from 2.5 in April while the finished goods price index fell to -8.3, its lowest reading since July 2010.

Midwest Dip in Manufacturing

Three of the four industry sectors tracked by the Chicago Fed Midwest Manufacturing Index (CFMMI) fell in April. Auto production declined 0.9%, steel production decreased 0.9% and the machinery sector declined 0.3%. The resource sector edged up 0.1% from March.

Overall, the CFMMI decreased 0.5% to 95.9 (2007 = 100). The index was revised to show a 0.3% increase in March. Compared to April 2012, regional output rose 3.3% in April and national output increased 1.7%.

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Steve Minter | Steve Minter, Executive Editor

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An award-winning editor, Executive Editor Steve Minter covers leadership, global economic and trade issues and energy, tackling subject matter ranging from CEO profiles and leadership theories to economic trends and energy policy. As well, he supervises content development for editorial products including the magazine, IndustryWeek.com, research and information products, and conferences.

Before joining the IW staff, Steve was publisher and editorial director of Penton Media’s EHS Today, where he was instrumental in the development of the Champions of Safety and America’s Safest Companies recognition programs.

Steve received his B.A. in English from Oberlin College. He is married and has two adult children.

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