Report: Texas receives a C for manufacturing, A for logistics; Dallas Fed says factory output up


Texas receives a C for manufacturing and A for logistics, so says annual report from Ball State University.

The 2019 Manufacturing Scorecard from Ball State’s Center for Business and Economic Research (CBER) analyzes how each state ranks among its peers in several areas of the economy that underlie the success of manufacturing and logistics.

These specific measures include: manufacturing and logistics industry health, human capital, cost of worker benefits, diversification of the industries, state-level productivity and innovation, expected fiscal liability, tax climate, and global reach.

Texas improved from “D” to “D+” in its Tax Climate and maintained its grade of “A” in Logistics and Global Position, “B+” in Liability Gap, “C+” in Diversification, and “C” in Manufacturing. Texas declined from “B” to “B-” in its Benefits Costs, ” B-” to “C+” in its Productivity and Innovation, and “C-” to “D+” in its Human Capital.

- FWBP Digital Partners -

Manufacturing remains strong in the state, according to a recent report from the Dallas Fed. The report said Texas factory activity continued to expand in July, according to business executives responding to the Texas Manufacturing Outlook Survey.

The production index, a key measure of state manufacturing conditions, rose from 8.9 to 9.3. Positive readings in the survey generally indicate expansion of factory activity, while readings below zero generally indicate contraction.

On the labor front, the employment index increased seven points to 16.0, and the hours worked index rose to 6.6.

“The July report reflected moderate expansion, with the production index continuing to oscillate around its long-run average,” said Emily Kerr, Dallas Fed senior business economist. “While we still see some weakness in the survey’s sentiment indicators—general business activity and company outlook—these indexes improved from June. One bright spot this month was stronger job gains, reflected by the employment index pushing up to a reading well above average.”

- Advertisement -

Other key takeaways from this month’s manufacturing report:

Perceptions of broader business conditions were less negative in July. The general business activity index rose six points to -6.3, and the company outlook index rose five points to 0.9.

Other measures of manufacturing activity suggested a slightly faster expansion. The new orders index edged up to 5.5, and the growth rate of orders index rebounded into positive territory, climbing nine points to 2.7. The capacity utilization index inched up to 11.2, and the shipments index jumped nine points to 10.2.

Manufacturers’ expectations about future business conditions improved. The index of future general business activity rose nine points to 6.0. The index of future company outlook moved up to 9.1. While positive, both readings remain well below average.

- Advertisement -

Texas produces around 10 percent of total manufactured goods in the United States, ranking second behind California in factory production. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.

To learn more about the Ball State report, visit the Manufacturing Scorecard project website.