Texas Slowdown in Manufacturing Continues

In recent months, the Texas manufacturing industry has experienced a gradual slowdown. As the end of the year looms near, the industry shows no indications of picking up, leading many in the industry to express concern. Whether you're on the manufacturing floor or dealing the business end of operations, it is crucial to keep an eye on the continuing trend.

For manufacturing professionals, the slow decline of Texas manufacturing has been an issue since October. When the Dallas Fed released its October report, industry professionals were shocked to see that the index had fallen to just 3.6—a dramatic drop from September's index of 12.8. Many experts expected that the index would bounce back in November to a level of at least 5.0.

Instead, the downward spiral continued, and the November index came in at 1.9. The November rating is the lowest since March 2013 and indicates a continuing decrease in manufacturing activity across the state. The decline in the overall manufacturing index indicates that regional manufacturing is slowing down, a concern for businesses across the state. Currently, the slowdown in Texas manufacturing has not had widespread economic effects, but if it continues, the outlook may not be as positive.

The Dallas Fed also collects other information that informs businesses and investors about the state of Texas manufacturing. Most of those metrics indicated a better outlook for people in manufacturing jobs. The production index, for example, rose from October to November. The index that measures new orders was unchanged, and the results of the survey indicate that the Texas manufacturing demand is continuing to grow. Other indices that saw growth include the capacity-utilization index and the shipments index.

The manufacturing index does not appear to be affecting the overall state of jobs in Texas. According to a recent article on dallasnews.com, the Dallas-Fort Worth area is experiencing faster job growth than the nation as a whole. Houston comes in just behind Dallas, indicating that the metropolitan areas of Texas are doing well in the labor market.

For people in manufacturing jobs, the positive employment performance is encouraging. The manufacturing industry has experienced growth over the past twelve months, though at a lower rated than other industries such as transportation and hospitality. In 2013 in Dallas-Fort Worth, the manufacturing industry added 2,200 jobs, which translates to a growth rate of 0.9 percent.

For Texas manufacturing professionals, the coming months will be crucial to the state of the industry. By paying attention to the reports issued by the Dallas Fed, your company can stay aware of the latest developments and make operational changes that will help the business stay afloat, even in tough times.

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