Texas manufacturing recovering: Dallas Fed survey

Growth in Texas’ manufacturing sector continued to recover this month, according to a survey of business executives by the Federal Reserve Bank of Dallas.

The manufacturing production index, a measure of the state’s manufacturing conditions, rebounded to 10.5 in January, the survey found.

In November, the index had turned negative, indicating a contraction in the sector for the first time since 2016. In December, manufacturers recovered slightly, with the index climbing back into positive territory at 3.6.

Much of Houston’s manufacturing sector, the largest sector of the local economy, is tied to the oil and gas industry. In comments made by respondents to the survey, manufacturers expressed concern about the oil field slowdown. Others wrote that trade uncertainty and an inability to compete with China was hurting business.

Last month: Manufacturing activity in Texas rebounded in December

Manufacturers have been hit particularly hard by the U.S.-China trade war, which has disrupted supply chains, raised costs and stoked uncertainty among customers, hurting profits in the sector.

“The macro backdrop continues to remain uncertain due to trade tensions, but recent events could begin to reduce the uncertainty,” wrote one respondent. “Of course, over the past two years, this has changed quickly with one tweet.”