February 7, 1973
The most recent indicators of economic activity in the Eleventh District show somewhat mixed changes. In December, the Texas industrial production index declined slightly and, although total employment in the five southwestern states continued to increase, the unemployment rates edged upward. Nevertheless, construction activity in the District rebounded in December and District department stores sales continued to rise in January. New automobile registrations declined slightly in December but were still well ahead of their year earlier pace.
The seasonally adjusted Texas industrial production index eased slightly in December from its record November level. Production in both the manufacturing and utilities sectors edged downward while mining recorded a slight increase. Within manufacturing, nondurable goods production was essentially unchanged, but durable goods output declined as sizable decreases were recorded in the production of stone, clay, and glass, electrical machinery, and furniture and fixtures. The drop in utilities output was the result of a reduction in the distribution of electricity, while the increase in mining was centered in the natural gas, and metal, stone and earth minerals industries.
Production in January was probably adversely affected by the weather as unusually cold temperatures reportedly caused mechanical problems that cut crude oil output in some fields. Temporary curtailment of natural gas distribution also forced some refineries to shift to other fuels, reducing output and efficiency.
Seasonally adjusted total employment in the five southwestern states rose in December for the sixth consecutive month. Nevertheless, growth in the labor force outstripped the gains in employment, causing the unemployment rate to edge up to 4.1 percent from 4 percent in November. Manufacturing employment was particularly buoyant as both the durable and nondurable goods sectors reported strong gains from November. Nonmanufacturing employment experienced a more moderate increase despite a sizable rise in service employment.
Construction activity in the five southwestern states, as measured by the value of contracts awarded, rebounded slightly in December, ending a three-month decline. Residential building fell for the fourth consecutive month, reaching the lowest level of activity since February. However, a sharp increase in nonresidential building and a more moderate increase in new building construction more than offset the residential building decline. The cumulative value of contracts for the District states for the 1972 year was nearly a fourth higher than in 1971.
Sales of department stores in the District continued to show year-to-year gains in January. In the five metropolitan areas for which data are regularly published, San Antonio and Houston showed the largest gains over a year ago, while Austin, El Paso, and Dallas recorded more moderate increases. The number of new automobile registrations in the four largest metropolitan areas of Texas—Dallas, Forth Worth, Houston and San Antonio—fall slightly in December, but were still ahead of their pace a year ago.
Agricultural activity slowed in late December and early January due to unfavorable weather conditions, and there was light freeze damage to winter crops. With the return of milder weather in recent years, most crops have recovered, and the cotton harvest is now about 90 percent complete. The unusually cold weather also resulted in higher than normal livestock losses. Subsequent heavy supplemental feeding added further to the problem of soaring prices of livestock feed. High feed costs are also of major concern to dairymen.