Federal Reserve Banks of Dallas and Richmond (05/26/2015)

Texas factory activity declined again in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index fell to -13.5, its lowest reading in six years. The new orders index held steady at -14.1, and the growth rate of orders index held steady at -15.2, marking the fifth and seventh negative reading in a row for these indexes.

Labor market indicators reflected employment declines and shorter workweeks. The May employment index declined 10 points to -8.2, after rebounding slightly above zero last month. Twelve percent of firms reported net hiring, compared with 21% reporting net layoffs. The hours worked index fell from -5 to -11.6.

Meanwhile, the Federal Reserve Bank of Richmond noted in its most recent survey that manufacturing activity flattened in May. The composite index for manufacturing moved to 1 following April’s reading of -3, while the shipments index leveled off to -1 from -6. In addition, the index for new orders gained eight points, reaching a nearly flat reading of 2. Manufacturing hiring continued to grow at a modest pace this month.