The Federal Reserve Bank of Dallas has released a report stating that the manufacturing activity index for Texas fell to -13.5 in February, coming in lower than analysts’ expectations of -9.5 from the previous month’s -8.4.
This marks the 10th consecutive month of contraction in the Texas manufacturing sector, which has been hit hard by the plummet in new orders and employment. According to the survey, the business sector still lacks confidence in the next six months.
The index, which is considered a key barometer of economic activity, is a weighted average of various indicators, including production, new orders, employment, and supplier delivery times. A reading below zero indicates a contraction in the manufacturing sector, while a reading above zero indicates expansion.
The drop in the index is a cause for concern, as the manufacturing industry is a significant contributor to Texas’ economy. The state is home to a range of manufacturing industries, including aerospace, biotechnology, electronics, and energy.
The survey also showed that many manufacturers are struggling with supply chain disruptions and rising input costs, which are affecting their ability to meet demand and maintain profitability.
The Federal Reserve Bank of Dallas will continue to monitor the situation closely and provide updates on the health of the manufacturing sector in Texas. However, the recent contraction in the index suggests that the road to recovery may be longer than initially anticipated.