Texas manufacturing levels stabilized during May

Reports earlier in the year were often highlighting the steep rates of contraction being felt in the manufacturing sector, but a new study from the Federal Reserve Bank of Dallas says that the slowdown has moderated.

According to the Texas Manufacturing Outlook Survey, which compiles responses from business executives in the industry, the sector's rate of decline has somewhat stabilized and at the same time expectations for the future continue to improve.

The future general business activity index, which broadly measures Texas manufacturing trends, had a positive reading for the first time in almost two years. Also, indexes tracking future production, shipments, new orders and growth rate of orders also improved.

Despite this seemingly good news, the survey of current conditions continues to reflect some pessimism.

Specifically demonstrating weakness were the measurement of capacity utilization and shipments, which both declined this month. Also, according to the survey conducted by the Dallas Fed, the overall business activity gauge remains negative.