Uncertainties, Upward Costs Impact Texas Manufacturing

While Texas manufacturing activity expanded in June 2019, measures were mixed, according to a report released by the Federal Reserve Bank of Dallas. The new-orders index was at 3.7, still below average, while the shipments index fell by six points to a two-year low of 1.7. The capital expenditures index fell by 11 points to 6.9, which was also a two-year low.

Perceptions of broader business continues also decreased; with the general business activity index declining to -12.1, a three-year low. The company outlook index fell to -5.5 (also a three-year low), while the uncertainty index measuring outlooks was at 21.6, its highest reading in more than a year.

Upward pressure on input costs was one reason for the negative impact. Furthermore, uncertainty and concerns over tariffs are in place.

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