Oil Prices Pressuring Texas Manufacturing

The Texas Manufacturing Outlook Survey, conducted by the Dallas Fed, showed mixed results in December. The general business activity index plunged to -20.1 from -4.9 in November indicating a continued weakness in manufacturing. Analysts expected a decrease but only to around -6.0. In contrast, the index for production rose 8.2 points to 13.4 during the month.

Capacity utilization and shipments were positive for the fourth month, increasing to 7.8 and 7.5, respectively. Demand, as measured by the new orders index, fell for the fifth month to register -9.7, its lowest level since August and thirteenth month in contraction. Business conditions in the Texas region were attributed mainly to the negative economic impact from the struggling oil and gas sector.