Dallas Fed: San Antonio, Texas Manufacturing Sectors Booming

Texas manufacturing activity is growing, and the Federal Reserve Bank of Dallas reports there is the most optimism it has seen among manufacturers that the growth will continue, News Radio 1200 WOAI reports.

"Texas factory activity expanded at a faster pace in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose 11 points to 27.9, signaling a pickup in output growth," the Dallas Fed said in its quarterly report.

Rey Chavez, President of the San Antonio Manufacturers Association, sees growth in the local manufacturing sector as well.

"More orders coming in, folks are expanding their factories and buying equipment, as well as doing some hiring," he said.

And key is the Dallas Fed's conclusion that there is more optimism for future growth than it has seen since 2006."Perceptions of broader business conditions improved further in February. 

"The general business activity index pushed up to 37.2, its highest reading in 12 years. The company outlook index climbed four points to 31.5, on par with its December 2017 reading, which was also the highest in 12 years."

Chavez says, thanks to the location of H-E-B's headquarters here, food related manufacturing remains very strong, as does tech, metal fabricating, oil and gas related, and aviation.

The Dallas Fed says much of the strength in Texas manufacturing steps from the return of the oil and gas industry, which is growing following three years of declines due to low global oil prices.

Chavez says there are some challenges on the horizon, including inflation.

"One of my members had to tell me that steel is higher than it has been in the past, so, yes, there will be an increase."

The Dallas Fed report shows that prosperity-reaching workers on the shop floor, indicating that manufacturing wages, which are already above average for San Antonio, are rising.

And Chavez says the biggest challenge is one that local manufacturers have been dealing with for two years, a lack of workers. He says the SAMA has robust programs in place with local high schools and Alamo Colleges to train young people for jobs in today's high tech manufacturing environment.

"When you're in an environment where unemployment is at 3% or less, that really makes it tough, when everybody's working'."


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