Econoday Economic Report: Dallas Fed Mfg Survey June 25, 2012

2012 Economic Calendar

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Dallas Fed Mfg Survey

Released On 6/25/2012 10:30:00 AM For Jun, 2012

	Prior	Consensus	Consensus Range	Actual
Bus Activity Index	-5.1	0.0	-11.5 to 2.0	5.8
Production Index	5.5			15.5

Highlights
There has been some concern from some manufacturing surveys that this sector may or may not be contracting. But news from the second largest manufacturing state indicates that activity is picking back up. The Dallas Fed general business activity index rebounded to plus 5.8 in June from minus 5.1 the month before. The market consensus expected a reading of 0.0 for the general business activity index.

Other measures of current activity generally improved in the latest month. The production index jumped to 15.5 from 5.5 in in May. Also, gaining were capacity utilization, new orders, unfilled orders, shipments, delivery time, number of employees, and average workweek. Specifically, the new orders index rose to plus 7.9 from minus 0.6 in May.

Overall, the Dallas numbers suggest that manufacturing in the U.S. is improving modestly. The numbers are not yet robust but are moderately positive.

Market Consensus before announcement
The Dallas Fed general business activity index slipped to minus 5.1 in May from minus 3.4 the month before. However, production held steady at 5.5 versus 5.6 in April, reflecting modest growth. However, forward momentum appears to have turned negative for the near term. The new orders index declined to minus 3.7 from minus 2.6 in April. Unfilled orders improved to minus 4.0 from minus 8.3. However, plant managers must be somewhat optimistic about future activity as the number of employees index remains moderately positive at 8.5 in May, compared to 11.8 the month before. For the six-month outlook, the numbers are more favorable. The general business activity slowed to 4.3 in May from 15.7 but remained positive.

Definition
The Dallas Fed conducts this monthly survey of manufacturers in Texas regarding their operations in the state. Participants from across the state represent a variety of industries. In the latter half of the month, the questions for the manufacturing survey are electronically transmitted to respondents and answers are collected over a few days. About 100 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in mid 2004. Participants are asked whether various indicators have increased, decreased or remained unchanged. Answers cover changes over the previous month and expectations for activity six months into the future. The breakeven point for each index is zero with positive numbers indicating growth and negative numbers reflecting decline. Why Investors Care

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