| Dallas Fed Mfg Survey | Back |
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Released On 8/25/2011 10:30:00 AM For Aug, 2011
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Prior | Consensus | Consensus Range | Actual |
| Bus Activity Index | -2.0 | -6.0 | -15.0 to -4.0 | -11.4 | | Production Index | 10.8 | | | 1.1 |
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Highlights
Manufacturing activity in Texas contracted in August, according to the general business activity index which dropped to minus 11.4 from minus 2.0 in July. The outlook remains modestly positive as the six-month outlook for this index posted at 2.9 versus 3.7 in July.
The production index, a key measure of state manufacturing conditions, remained positive but fell from 10.8 to 1.1, suggesting growth stalled this month. Most other measures of current manufacturing conditions indicated slower growth in August. The new orders index fell from 16.0 to 4.8 this month, suggesting order volumes continued to increase, but at a decelerated pace. The shipments index was positive and little changed, edging down from 7.8 to 6.7.
Labor market indicators reflected slower labor demand growth. The employment index came in at 5.4, down from 12.1 in July. Twenty-three percent of manufacturers reported hiring new workers, while 17 percent reported layoffs. The hours worked index fell from 7.9 to minus 2.2, suggesting average workweeks shrank.
Input prices and wages rose at a slower pace in August, while selling prices were unchanged. The raw materials price index retreated from 34.3 to 23.2, its lowest reading since September 2010. The finished goods price index came in at minus 0.5, down from 4.6 in July. The near-zero reading suggests selling prices were flat in August.
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Market Consensus before announcement
The Dallas Fed general business activity index in July remained negative for the third month in a row but jumped from minus 17.5 to minus 2, suggesting only a slight worsening the latest month. The production index, a key measure of state manufacturing conditions, rose from 5.6 to 10.8, suggesting output growth. Other measures of current manufacturing conditions also indicated growing activity. The shipments index rose to a reading of 7.8 after coming in at zero last month and the new orders index rose sharply from 6.4 in June to 16 in July. Thirty-four percent of firms said order volumes increased in July, the highest share since November 2010. Expectations regarding future business conditions were generally more optimistic in July.
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Definition
The Dallas Fed conducts this monthly survey of manufacturers in Texas regarding their operations in the state. Participants from across the state represent a variety of industries. In the latter half of the month, the questions for the manufacturing survey are electronically transmitted to respondents and answers are collected over a few days. About 100 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in mid 2004. Participants are asked whether various indicators have increased, decreased or remained unchanged. Answers cover changes over the previous month and expectations for activity six months into the future. The breakeven point for each index is zero with positive numbers indicating growth and negative numbers reflecting decline. Why Investors Care
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