Economic activity collapses in Texas (USD)

Wikimedia Commons

Economic activity in Texas keeps getting worse.

The general business activity index out Monday from the Dallas Federal Reserve for January was -34.6, a six-year low, and much worse than economists had estimated.

The forecast for the index was -14, following the prior reading of -21.6 (revised from -20.1) that was also worse than expected.

An index reading below zero indicates contraction. The index was sub-zero for all of 2015, as low oil prices slammed companies exposed to the energy sector and a broad-based industrial slowdown took its toll. 

"The impact of the continued decline in the energy sector, compounded with several new regulations from both the Environmental Protection Agency and Occupational Safety and Health Administration, is depressing economic conditions even further from 2015," said one survey respondent in primary metal manufacturing.

"Demand slowed more quickly than is typical in December," said another in computer and electronic product manufacturing. "Early demand is weaker in January, leading to the belief that growth in 2016 may be elusive."

Basically everything got worse, according to this survey.

The production index, which gauges manufacturing in the state, fell 23 points from 12.7 to -10.2. 

The employment index also fell into negative territory, as a greater share of firms said they laid off more people than they hired. Wages, however, continued to increase.

Expectations for business conditions in the future "weakened notably". The company outlook index was negative for the first time in seven years.  

This is a chart of the production index that gauges manufacturing:Wikimedia Commons

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