Metrics of manufacturing activity pointed to continued expansion in February 2020, even as demand growth declined, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey. While the growth rate of orders index fell, the production index, a measure of the state’s manufacturing conditions, increased to 16.4, which, according to Dallas Fed analysts, suggested stronger output growth than that reported in January 2020.

Also increasing slightly were perceptions of broader business conditions, with the general business index activity edging up to 1.2, and the company outlook index ending up at 3.6. Additionally, the index measuring uncertainty regarding companies’ outlooks also moved up eight points, after falling the prior two months.

Still, expectations regarding future business conditions were slightly more optimistic; while other indexes for future manufacturing declined slightly, they remained in positive territory, Dallas Fed analysts noted.

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