February Market Minute 2024

Texas Manufacturing Faces Contraction

The manufacturing economy in Texas faced contraction in January, according to the Dallas Fed's Texas Manufacturing Outlook Survey. Key indicators:

• The production index dropped significantly by 17 points to -15.4, marking its lowest level since mid-2020.

• New orders, growth rate of orders, capacity utilization, and shipments, also pointed toward contraction.

• The general business activity index fell to -27.4

• The company outlook index dropped to -18.2

• Labor market measures indicated employment declines and shorter workweeks, with the employment index at its lowest since mid-2020

While wage and input costs continued to rise, selling prices remained flat. Future expectations for manufacturing activity improved in January, with the future production index increasing. Still, the future general business activity index remained negative at -10.4, showing a cautious outlook for the coming months.

Shifting Metals Market Impacts Texas Buyers

Metal plate prices, though historically high compared to sheet prices, are gradually returning to normalcy. The current spread stands at plate prices being $298/ton above sheet prices, a notable drop from the peak of $700/ton early last year.

On the other hand, sheet prices continue their downward trajectory, currently at approximately $900, marking a $170 decrease from the previous year's figures.