May 17, 1972
Indicators of economic activity in the Eleventh District continue to show strength. Industrial production rose to a record level in March, and total employment in the five District states continued to increase. Construction activity in the District also picked up in March, after slowing in February, and retail sales continued to show steady improvement.
Seasonally adjusted total employment in the five southwestern states rose only slightly in March, and with the labor force continuing to expand, the average unemployment rate rose to 4.5 percent from 4.4 percent in February. Nonfarm payroll employment continued to increase, although not as fast as in recent months. The largest increases among the major industry groups were in construction and finance. Mining, transportation and public utilities showed slight declines, but remained above their March 1971 levels.
The seasonally adjusted Texas Industrial Production Index rose in March for the third month in a row, reaching a record 127.9 percent of its 1967 base. The manufacturing and utilities sectors both contributed to the rise, while mining declined slightly. In manufacturing, all durable goods industries showed production gains, with the largest being in transportation equipment. Among nondurable goods industries, significant gains were reported in textile mill products, printing and publishing, and petroleum refining. Food products, paper and allied products, and leather and leather products experienced declines in production from February, operating below their year-ago levels. Production of crude oil and natural gas declined slightly from February, but the mining of natural gas liquids, metal stone, and earth minerals increased moderately. Output of utilities increased substantially over the month before as a result of the increased distribution of electricity and gas.
Oil allowables in all four major producing states in the District were left unchanged for May. Regulatory commissions in Texas and Louisiana announced that their rates are at the highest level proper conservation will allow. It was believed that any further increases would damage producing fields.
Construction activity in the five southwestern states, as measured by the value of contracts awarded, rose significantly in March after falling in February. Residential building continued to provide much of the impetus to the construction industry, but both nonresidential building and nonbuilding construction also increased substantially. Construction activity in Texas, however, recovered only slightly after a substantial decline in February. Nevertheless, the cumulative value of contracts awarded in Texas during the first three months of this year was more than a fourth higher than in the corresponding period last year.
Sales of department stores in the District continued to show year-to-year gains during April. Among major metropolitan areas in Texas, sales were strongest in Dallas and Houston, while San Antonio showed moderate gains and El Paso no gain over the April 1971 level. Automobile registrations in the four largest metropolitan areas of Texas made substantial monthly and year-to-year gains in March. Total registrations in these four areas for the first three months were up 13.4 percent from the corresponding period a year ago.
Agricultural prospects in the District states are progressing well. Recent rains have improved general crop and livestock conditions in all but the western states of the District. Cattle feeding continues to expand in the District's cattle feeding states of Arizona, Oklahoma, New Mexico, and Texas, as the number of cattle on feed on April 1 totaled nearly 16 percent more than a year before. This compares with a 9-percent gain for the nation's 23 most important cattle feeding states.
A sharp drop in prices of poultry and eggs, together with a decline in livestock prices, caused a modest decrease in the index of prices received by Texas farmers and ranchers during the month ending April 15. The index of all crop prices rose slightly from mid-March.
Total credit at weekly reporting banks in the District rose moderately in April, following a rapid advance in March. Total loans made notable gains, as all major categories of loans rose in response to further improvement in economic activity within the District. District banks also added to their investment portfolios in April, as sizable acquisitions of Treasury Bills exceeded declines in holdings of U. S. Treasury Notes and Bonds and municipal issues. Total deposits of weekly reporting banks contracted slightly in April, due mainly to a sizable reduction in the volume of large CD's outstanding.