Texas Factory Activity Declines in May; Lowest Reading in Six Years
The Texas production index is the measure of the health of manufacturing. The index fell to a negative 13.5 in May—its lowest reading in six years. (Source: Federal Reserve Bank of Dallas, last accessed, May 27, 2015.)
Texas is the second-largest producer of manufactured goods in the United States behind California. In May, Texas factory activity indices fell for the fifth consecutive month.
See the chart below of the Texas Manufacturing Production Index. According to the Federal Reserve Bank of Dallas, general business activity in Texas in May was at its lowest level since June 2009.
Looking at the past 12 months, the index has collapsed more than 200%. Back in May of last year, the index stood at 11.6.
The general business activity index fell to -20.8 in May, another decline of more than 200% from 8.6 in May 2014. This is also its lowest reading since June 2009. Business activities that have been affected include areas like operations, hiring, production, and administration.
The company outlook index moved down to -10.5, also hitting a low not seen since summer 2009.
Labor market indicators reflected employment declines and shorter workweeks. The state sentiment on hiring fell in May, with 12% of the reporting firms announcing net hiring against 21% reporting net layoffs. (Source: Federal Reserve Bank of Dallas, last accessed, May 27, 2015.)
Oil Production Slows Down in Texas
Since oil prices started to decline last summer, the number of rigs drilling in the U.S. has fallen to multi-year lows. Data shows that Texas, the number one oil producer in the U.S., has 373 drilling rigs in service as of Monday, May 22. This is down significantly from 889 active rigs from last year. (Source: BakerHughses.com, last accessed, May 27, 2015.)