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Business Review

July 1975
Border IndustriesInflation in Mexico and Recession in U.S.
Threaten Maquiladora Accomplishments
This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org)

Border Industries-

Inflation in Mexico and Recession in U. s.
Threaten Maquiladora Accomplishments
......
After n I
rupt dear y a decade of uninterdorae. growth, Mexico's maquilaened ~ndustry is suddenly threaty the coincidence of the
doWnturn
.
the sha I?J t~e U.S. economy and
F rp l'lSe ill Mexican wages.
del' ~red as part of Mexico's borD.S ustry program to encourage
ass e' manufacturers to establish
bordmbly plants just south of the
Plan:r', the maquiladora (twinhelPin md,;!stry had gone far in
ch .g relieve that country's
rOnIC u
I
norther ~emp. oyment along its
this indn ronber. Employment in
80 000 lustry reached a peak of
ast fall.
Octob
n
was slidin :r, th e U.S. economy
g mto a full-fledged

threaten economic development
recession, cutting demand for the
made over the past ten years in
consumer goods produced on the
border. At the same time, Mexico's cities all along the border-including cities on this side.
latest hike in its minimum pay
scale went into effect, boosting
Border industry program
wages 22 percent. By April, more
than 30 plants had closed and
Mexico established its border
another 60 had made substantial
industry program in 1965.
layoffs.
Designed to encourage the location of U.S. assembly plants just
As a result, employment in
Mexico's twin plants (called
south of the border, the program
maquilas) fell to about 45,000
was intended to help deal with the
high unemployment on Mexico's
workers. And most plants were
further trimming their payrolls by northern frontier. Always high
along the border, unemployment
reducing the workweek. All told,
had become especially severe the
cutbacks on the border are
year before, when the bracero
believed to represent a loss in
program was suspended.
wages of 300 million pesos a year$24 million. And with employment
The bracero program had been
........
continuing to fall, no more than
established in 1951, providing a
40,000 workers are expected to be
means for Mexicans to enter the
~------ on
maquila
payrolls
at
year-end.
United States to do seasonal farm
MaqUila
When I employment was soaring
work. Because the lure of higher
Just how critical the situation
90
P ants began shUtting down
wages in the United States drew
has become is pointed up in a
THOUSAND~
. ______________
farm workers to border towns in
recent statement by the'president
numbers that nearly always
of Mexico's coordinating council
exceeded the jobs available, surof the maquiladora industry:
plus workers tended to stack up
It is a duty of the Coordinating
at the border, keeping unemployCouncil and the federal government to find some formula to stament high all along the northern
60_
bilize the existence of these .plants
reaches of Mexico.
in Mexico. Otherwise, we face the
When the program was susvery real risk of seeing the majority
pended in 1964, roughly 185,000
of our maquiladoras disappear.
Mexicans were suddenly thrown
And just how important the sitout
of work in the United States
uation is for states of the Eleventh
30_
and returned to Mexico. UnemDistrict is pointed up by the location of these plants. Nearly 60 per- ployment along the border soared.
And the Mexican government
cent of the plants are across from
cities from Brownsville to Tucson- began trying to devise means of
putting surplus workers to work.
and these are the big plants.
Actually, Mexico had been slow
Accounting for fully 85 percent
in taking advantage of its labor
of both the investment in the
costs, low relative to those in
maquiladora industry and the
SOUl!
67 '69 '71 '73 '75
the
United States, maintaining
value added in twin-plant operaCE: America
that made it almost
obstacles
of Min Chamber of Commerce
tions, they provide nearly 75 perex co
impossible for a foreign-owned
cent of the employment. Loss of
..............
company to locate in that country.
payrolls of these plants would

° ~IIIIIIIII

nh_'~-------------
.... utessn .
eVlew I July 1975

When Japanese manufacturers
there were more than 200 plants,
value added-which accounted for
began making inroads into U.S.
employing 29,000 workers. The
about 28 percent of Mexico's formarkets by underselling domestic
peak was reached last year, when
eign sales of manufactured goods
producers of labor-intensive goods, 550 maquilas employed 80,000
and 17 percent of its total exports.
U.S. manufacturers turned to the
workers.
Maquila plants
Far East for plant sites.
Investment in the maquiladora
The maquiladora industry is dorn:
Only after Mexico's Secretary of industry totaled $63.7 million last
Industry and Commerce toured the year-or 796 million pesos. As large inated by plants assembling electl'lC
as that amount is, it vastly underand electronic units. Accounting
Far East in early 1965, seeing
states the importance of this indus- for fully half the investment in
goods being assembled in Ameritry to Mexico, since-as is usually
maquilas, these plants, the largest
can-owned plants for sale in U.S.
the case with operations that are
and best equipped on the border,
markets, did the Mexican governhighly labor-intensive-these plants provide roughly two-thirds of the
ment move to attract U.S. plants.
use little capital equipment, comemployment, payroll, and value
Recognizing the benefits to be
added.
derived from assembly plants along pared with most manufacturing
The next most important plants
its northern border, Mexico moved plants in the United States.
American companies operatassemble ready-to-wear garments
quickly to remove barriers to entry
from pieces cut in the United
by U.S. companies. Provisions were ing in Mexico have estimated
that every peso invested in the
States. Plants in this category
made for allowing foreign comaccount for nearly a third of the
maquiladora industry results
panies to lease land along the borannually in 4 pesos of payroll, 6
der. And by making extensions of
maquilas.
pesos of exports, and an addition
Although these two types of
leases virtually automatic, the
of 12 pesos to the country's output. plants form the backbone of the
Mexican government was able to
maquiladora industry-accounting
Their estimates of the direct
sidestep a constitutional prohibipayroll from maquila plants last
for not only two-thirds of the
tion against the foreign ownership
installations but four-fifths of th e
year range from $120 million
of land within 100 kilometers (62
to $136 million. These plants
workers, payrolls, and value ad de dmiles) of its borders and coasts.
exported about $145 million in
other industries are also well
The custom code was modified
to allow machinery and equipment
to be imported from the United
States duty free, provided the
Electric and electronic products account
imports were used for assembling
for over half the investment in maquila plants ...
products that would be shipped
back into the United States. Materials and components to be assembled in Mexico were also exempt
MISCELLANEOUS - 16.8%
from tariffs.
~1~liJS~~I~+- WOOD PRODUCTS - 2.4%
Regulations requiring that Mexi-..:..'.,•........-- LEATHER AND FOOTWEAR - 12.2%
can nationals share in the ownership of any foreign-owned plantGOODS AND TOYS - 3.4%
r'1t=:::5~~~~II!:= SPORTING
TEXTILES - 8.4%
joint ownership usually being
t;#i!iii#.#;!;i==~#,;=:.;;;;#;;;t+-- FOO 0 PRO 0 U CTS - 1.7%
achieved by selling a negotiated
percentage of shares on the Mexican stock exchange-were also
,'.15(:1 1+- ELECTRIC AND
waived, allowing foreign ownership
ELECTRONIC PRODUCTS - 55 .1%
of maquila plants.

1%m%%I"i~im+--

Maquiladora industry
These obstacles removed, twin
plants sprang up rapidly along the
border. Before the year was out,
12 maquilas were operating in
Mexico, providing employment
for over 3,000 workers. By 1971,
2

TOTAL,1974 - $63,675,440
SOURCE: Secretary of Industry and Commerce, Mexico

------------------------------------------------~

represented. These include food

production in the United States
Components are allowed into
went for labor.
Mexico
in bond, meaning they are
qU~pment, and transportation
Companies participating in the
imported
temporarily, awaiting
b~Ulpment, particularly automoborder
industry
program
typically
assembly
and
return to the United
f e accessories. There are even a
manufacture
components
of
their
As
they
will not be offered
States.
ew plants that punch computer
products in this country, making
for
sale
in
Mexican
markets, they
cards
f
U
S
'
A Or ' . busmesses.
the best possible use of the equipcan enter that country duty free.
al Irnost all the plants are in cities ment available at their plants on
And under Sections 806.30 and
th~1 the b?rder. In the beginning, this side of the border before ship- 807.00
of the U.S. tariff schedule,
.order Industry program
ping the components into Mexico
restrIcted A
.
only the value added by foreign
to I
.
mencan-owned plants
for assembly. The product is then
processing is subject to import
bor ~catlons within 12 miles of the
returned for sale in the United
duty
when an item produced origlat er. And While efforts were
States.
inally in the United States is
of i~ mad~ t? br~g the be~efits
To hold down transportation
returned to this country for sale.
of M:du~tnalizatlOn to the Interior
costs, many companies established As labor costs are fairly low on the
eJQco by allowing plants to
operate'
plants to make components on
border, duties on the work done
th
of the In o. er areas, 95 percent
this side of the border directly
to increase the value of products
on th maquzla plants were still
across from the assembly plant in
at maquila plants add comparaShutt? border When they began
Mexico-an arrangement that gave tively little to total costs. Even so,
Al mgdown.
rise to the idea of twin plants.
only products with classifications
ind Stf ough the maquiladora
Although this was not the arrange- requiring custom duties of 25 pertnak ry Was initiated primarily to ment used by all companies-some
cent or less of the value added are
un e Use of the large pools of
manufacturing their components
usually considered feasible for foron ~~P~oyed male farm workers left hundreds of miles from the border- eign assembly.
Pro e order When the bracero
it had the advantage of allowing
Year of reversal
the ~0 en~ed, fully 90 percent of the same management team to
Most r {ers In maquilas are women. oversee both stages of production.
Prospects were bright for the
frOIn la re Young, their ages ranging
Even with low labor costs, howmaquiladora industry as it went
6 t 024.
ever, foreign assembly oper~tions
into 1974. The value of shipments
EJecept f
.
need f
or r~re Instances where
are feasible only as long as Import
from maquila plants increased 65
strength
01' technIcal skill or physical
duties do not offset labor savings.
percent in both 1972 and 1973,
m
.
etnpl
ay gIve men an edge in
used o~ment
markets, men are
0
EJe ~ on night shifts.
ash ort
Perlence
t .. has been that after
. .. and over two - thirds of the value added
one to thralnIng period, usually
wOm
ree months, Mexican
worke; make up a highly efficient
A;:liii:iiiijiii~!c---- FOOD PR OD UCTS - 1. 9 %
tasks por~e. In the simple, routine
Plants o~ed in most of these
w,\.~.-- APPAREL AND FOOTWEAR - 13 .5 %
siderabl eJQcan women are conequ' I Y more productive than
Stat:: ~nt labor in the United
NONELECTRICAL MACHINERY AND
ductivit n. Some plants, their proTRANSPORTATION EQUIPMENT - 4.1 %
cent YIS thought to be 30 perFURNITURE - 2 .2%
greater.
A.ttract'
'l'h
Ion to Americans
~"...~- MISCELLANEOUS - 8.8%
eabund
on the b ance of low-cost labor
ELECTRIC AND
tive for order. provided the incenJ C - - - - ELECTRONIC MACHINERY AND
COMPONENTS - 69 .5 %
to Set Amencan manufacturers
TOTAL, 1974 - $144,975,200
it was ~p maquila plants. As a rule,
SOURCE: Secretary of Industry and Commerce , Mexico
Sible if gured that a plant was feamore than half the cost of

~ro:essing, furniture, oil field

aUsine

ss 4l. eview I July 1975

Prices soar in Mexico ...
25 PERCENT CHANGE - - - - (ANNUAL AVERAGES)

CONSUMER PRICES

20 -

000

~:o:o:~

10 -

:o:o::j

00-0-'
000
)000
0000
000

COQO

laoa

OOti~

1000
0000
000
0000

197Q

)QOO!
0000

)000
0000
)000
0000
000
ODOU

000

ouoo

000
0000
000

0000
000

ooon

1972

1974

SOURCE: BankotMex~o

and with roughly the same gain
expected in 1974, there was a general belief that the border industry
program was just beginning to
reach its potential.
By the end of the third quarter,
the value of goods returned to the
United States was running 60 percent ahead of the value at that
time a year before. But in the
fourth quarter, two distinct problems surfaced, casting doubts on
the future of the program. By yearend, more than 30 plants had
closed and employment had been
cut in half.
Always dependent on retail sales
in this country, the industry began
feeling effects of the cyclical downturn in the United States in late
1974. As the recession, particularly in its early stages, impacted
primarily on consumer spending,
the brunt of the downturn was felt
on the border. New orders fell
sharply, and cutbacks in production followed aln!os1dfPmediately.
4

At about the same time, in
October, a 22-percent increase in
Mexican wage rates became effective. The increase had come as the
result of Mexico's inability to bring
its wage-price spiral under control.
Until 1970, the Mexican government had been fairly successful in
keeping inflation in check. Consumer prices had been going up
throughout the previous decade,
but the government had been able
to hold the rise to an annual average of 4 percent.
Beginning in 1970, however,
prices began rising rapidly,
prompting the government to
undertake a restrictive economic
policy. But the restrictiveness fell
more on real growth than on prices.
In constant pesos, the country's
growth in output slowed to 3 percent in 1971, compared with 7 percent in 1970-which was the average annual growth for the 1960's.
To get the sluggish economy
rolling again, policymakers then
shifted to an expansionary program, allowing growth in the
money supply to accelerate. For
the next three years, there was no
letup in the stimulus provided the
Mexican economy. By 1974, the
country's money supply was 84
percent greater than when the
expansion began in 1971.
In early 1973, there were signs
that the recovery was proceeding
too fast, allowing price pressures
to build. By the end of the year,
consumer prices had risen an average of 12 percent-twice the average
rate for the previous three years.
Then in 1974, they jumped 24
percent.
Soaring prices led to incessant
demand for across-the-board wage
increases. And in an effort to preserve the purchasing power of
Mexican workers, a series of wage
hikes were allowed, pushing minimum wage rates higher and higher.
Early this year, the minimum wage
along the border averaged 813 per-

... under stimulative policies
designed to spur economic growth
25 . PERCENT CHANGE
(ANNUAL AVERAGES)

20 -

15 -

MONEY
SUPPLY

10 -

5 -

o
1970

1972

1974

1974 preliminary
SOURCE: Bank ot Mexico

cent higher than just two years
before.
Loss of advantages
As labor costs in the maquiladora
industry soared, American coIllpanies with operations on the
border reexamined the feasibility
of continuing to conduct their
assembly operations in MexicO.
In relation to pay scales in the
United States, the border industrY
program had lost none of its attraCtiveness over the previous two
years. In early 1973, minimuIll
wages in principal Mexican cities
along the border averaged less theJl
50 cents an hour, compared with
$1.60 in this country. Two years
later, they had reached more than
90 cents an hour. But with the
minimum wage in the United
States now $2.10 an hour, there
was an even greater differential
than before. Where labor costs r
could be cut at least $1.10 an hott

~Mon~uC~ing assembly operations unemployment. A bill being con- that would keep the Government
cut e}Qco III 1973, they could be
sidered in Congress would elimi(the nation's biggest buyer) from
I nearly $1.20 an hour in 1975.
nate Sections 806.30 and 807.00.
purchasing goods brought into this
of world labor markets
country from foreign assembly
h n terms
.
, A clearly protectionist mood is
10OWeve
. r, Me}Qcan
workers were
in
the
following
protest
reflected
plants.
And the Trade Reform Act
h g most of the advantages they made in the introduction of the
passed early this year gives the
t~ offered American manufacbill:
President discretionary power to
Par~rs. In fact, as far as U.S. comsuspend imports under provisions
Many desperately needed jobs are
ra 11!es were concerned, they were
being farmed out by U.S. manuof the tariff schedule that make
Pldly
facturers who are able and eager
th
Pricing themselves out of
maquila plants feasible.
e market.
to take advantage of some glarProtectionism in this country
ing
loopholes in the U.S. tariff
an
for!Feric ~ompanies looking for
could even increase. While the
schedules.
att gn.locatlOns today receive
recession that precipitated layoffs
This interest in protecting
A.~a~tlve offers from other Latin
here
and in Mexico is believed to
American jobs is reminiscent of the
Co enc:an countries and from
have
reached bottom, this country
mood that resulted in termination
va~ntrles in the Far East. EI Salcould face several years of relaof the bracero program ten years
ag ~:' <?olombia, and Costa Rica
tively high unemployment rates.
ago, prompting creation of the
to !ttSslvely pursue opportunities
In the final analysis, howevermaquiladora program in the first
t·
ract labor-intensive operaassuming no change in the tariff
place. It carries over into one bill
Ions
And
H
't'
h
.
tWin .
al I as Illvited all
reloc~fal!ts operating in Mexico to
case e III that country. In every
Meti countries competing with
MAQUILADORA INDUSTRY IN MEXICO, BY MAJOR CITIES, MID-1974
Perc co offer wage rates 50 to 80
nt lower than on the border.
Workers
Payroll'
Plants
City
Value ,added'
lish de result has been that estab8,964
45
$9,358,640
Matamoros ..... . .
$14,005,200
CO~t ~lants are relocating to other
856
711,440
11
Reynosa ... .... ..
1,626,720
Nuev nLs. An electronics plant in
5,516
6,599,200
17
Nuevo Laredo .. ..
8,581,280
lllov 0 aredo, for example, has
3,094
2,817,200
15
Piedras Negras ...
4,801,120
d
2,374
2,142,560
9
Ciudad Acuna . .. .
2,756,800
A.t it: to the British West Indies.
21,334,400
17,484
89
Ciudad Juarez .. . .
37,253,760
Plant peak at Nuevo Laredo, the
10,688,320
8,517
.
..
....
..
48
17,211,840
Nogales
'l'r employed 800 workers.
8,714
11,329,920
71
18,145,120
Mexicall ..... ....
13,101,920
10,024
101
20,714,880
Tij uana .. ... .....
oublesome outlook
Of COndit.
1, Annual rate
lado r
Ions affecting the maqui- SOURCE
: Secretery of Industry and Commerce, Mexico
this ca program, the recession in
diate ~hntry poses the most immethe sit re~t. But in that regard,
not di1fuatIon on the border does
E··················.·······...............:
CALIF.
other er substantially from that in
lOCal areas, such as Detroit where LOS ANG'ELES
prod t·
,
...•....
are tied t Uc IOn and employment
gOods w? demand for consumer
•
tJ S . Ith recovery in the general
DALLAS
. . econom d
Produc d y, emand for goods
e}Cpecte~ on ~he border can be
More . to PIck up again.
COuld b llllportant in the long run
e~ e efforts in this country to
sched ~te provisions of the tariff
bly op~ e i?at make foreign ass emPlace-e~a IOns Possible in the first
the rec o~s that tie directly to
eSSIon and resulting rise in

s:r

'I'h

nUs'
Uless R

eView I July 1975

schedule-the future of the border
industry program is closely linked
to the ability of Mexico to come
to grips with its wage-price spiral.
The danger of continued escalation of Mexican wages was heightened early this year by provisions
for annual negotiation of labor contracts. In the past, contracts have
been negotiated every two years,
which provided at least some
dampening to the rise in labor
costs. If inflation continues in
Mexico, wages could now rise even
faster.
If wage rates continue to rise in
Mexico, more manufacturers are
apt to follow companies that have
left Mexico for other countries.
Because maquila plants contain
comparatively little capital equipment, they are highly mobile. One
Ciudad Juarez plant completely
disappeared last year over a threeday weekend.
A manufacturer with a foreign
location has to make sure labor
costs are low enough to more than
offset transportation costs. And
many of the goods produced on the
border are the very kind that could
be produced in other locations.
It takes considerable labor, for
example, to make most electronic
equipment, which is fairly inexpensive to ship. It has also been assembled for years in such places as
Hong Kong, Singapore, South
Korea, and Taiwan.
Impact on both sides
Cutbacks in maquila employment
have boosted unemployment in
Mexico's border cities to the highest levels in ten years-with important implications for cities on both
sides of the border.
Termination of the bracero program in 1964 added 185,000 jobless workers to the ranks of unemployed on the Mexican side of the
border. So far, layoffs at assembly
plants on the border have totaled
less than a fourth of that. Over6

all, however, the impact on the
Mexican economy could be much
greater.
The difference is that, unlike the
mass of migrant farm workers
thrown into unemployment ten
years ago, workers in border assembly plants have become settled
members of emerging industrial
communities. Although the preponderance of these assembly
workers are women, many of them
are the only wage earners in their
families. And the regular earnings
they bring into their households
have been working changes along
the border that wages of the predominantly male braceros never
could have brought.
Having come into the mainstream of industrial communities,
these workers have learned to
depend on regular paychecks. And
just as important, the economy,
nationally and locally, has learned
to depend on them as participating
economic units.
They and the plants where they
work provide a valuable source of
tax revenue in an economy where
the government already finances a
large part of its operations by borrowing. The plants pay sales taxes
on the value added by assembling
American goods. And employees
pay a 5-percent payroll tax into
a workers' housing fund and a 1percent tax for education.
Loss of these tax revenues could
add to inflationary pressures in
Mexico. From 1972 through 1974,
the Mexican government financed
more than a fourth of its expenditures by borrowing. Roughly the
same deficit was forecast for this
year, but with plants closing on
the border, the shortfall could be
even greater. Maquila plants have
accounted for some of the most
stable production and employment
in the country outside Mexico City
and the Federal District.
Employment at maquila plants
has also been working basic

changes in local economies along
the bordet . With more of the local
labor force having dependable
incomes and stable employment
records, for example, arrangements
for consumer credit have developed, allowing purchases of such
big-ticket items as cars and household appliances.
Auto sales have been especially
important in these border cities.
Unlike many consumer goods that
are bought freely on both sides of
the border, almost all automobiles
are bought from Mexican dealers.
In addition to problems of financing Mexican purchases of consumer goods in the United States,
there are nearly prohibitive import
duties on automobiles in Mexico
that keep their purchases pretty
well on that side of the border.
Thus, with the greater availability
of credit in border cities, Mexican
auto dealers have seen a marked
improvement in sales.
All these economic developments
come as part of significant social
changes in Mexico that could be
set back by curtailment of the
maquiladora industry. Plant workers, for example, participate in a
social security program that makes
their families eligible for medical
and other services that would be
lost if they were unemployed.
But the Eleventh District does
not escape implications of the
slowdown on the Mexican side.
The Mexican Embassy estimates,
for example, that 60,000 U.S. .
workers are dependent on work 111
maquila plants. And more than
half these workers are probably 0
in states of the District. In EI paS
alone, manufacturing of parts
for assembly in maquila plants
accounts for 2,500 industrial jobS.
And as the maquila plants are
almost totally dependent on
suppliers for materials and equIPh
ment, one of the bypro ducts of t e
border industry program has beeJl
the development of an industry,

D.?·

~c~ted ahnost exclusively in the
ptlted States, to service and supTKeassembly plants in Mexico.
h Se businesses, mostly supply
p~uses and repair shops, face the
ospect of haVing to trim their
bayrolls as maquila plants cut
ack on their operations. Workers
engag d'
·
e In these support funct IOns
. the
th in El P aso number In
oUsands
all~o~eo~~r, retail sales in almost
cl ' . cItIes on the border are
.
.
MOsely
. tied t 0· Incomes
In northern
so~~c~. :rhat is especially true for
conuncltIes, such as El Paso, where
sp . uters from Ciudad Juarez
th e~d more than three-fourths of
thelrlPaychecks. For that reason
.
'
e s owd'
lllent. own In maquzla employsOllle IS apt.to impact more on
on th ~eflcan merchants than
bord elr counterparts across the
er.
wo!tol?, the 80,000 Mexican
Peak rs In maquila plants at the
lllanyof employment supported as
lllost o~St~OO,OOO dependents. And
these
e goods and services
by tn people bought were provided
Dist :rchants in the Eleventh
llct.
In
a li h
the flo s g. tly different context,
border~ of illegal aliens across the
elllpl IS expected to increase as
MeJtioYment declines in northern
alIo ?o. This flow-which led to
Sta;vmg braceros into the United
in thesfiUUder a controlled program
to the rs~ place-is directly related
Skill e availability of jobs for lowAlwaWorkers in both countries.
s
grati: a problem, illegal immin shOuld be taken into

account now as a new mood of protectionism threatens to increase
the growing problems of maintaining employment on the border.
Already, the Justice Department
estimates there are 500,000 illegal
aliens in Texas alone.
There is a long history of income
and employment problems on the
border. And these problems are
significant on both sides.
The maquiladora industry has
suffered a serious setback. With
loss of the competitive advantage
of plants in Mexico to labor markets in other parts of the world,
service industries and retail establishments across the southern
reaches of the Eleventh District
have also suffered setbacks.
The protectionism being promoted by suggestions to amend
U.S. tariff schedules would totally
negate Mexico's maquiladora
industry. These suggestions are
made without appreciation that
this industry represents only the
latest effort to alleviate high
unemployment in a region pla~ed
by persistent poverty on both SIdes
of the border.
-Myron T. Butler

n...
· b
-lneSs

.
.Q.evlew / July 1975

New member banks

Central National Bank, Arlington, Texas, a newly organized institution located
in the territory served by the Head Office of the Federal Reserve Bank of Dallas,
opened for business June 9, 1975, as a member of the Federal Reserve System.
The new member bank opened with capital of $400,000, surplus of $400,000, and
undivided profits of $200,000. The officers are: Marvin M. Stetler, Chairman of
the Board; Harold E. Patterson, President; and Nathan L. Robinett, Vice
President and Cashier.
National Bank of Grand Prairie, Grand Prairie, Texas, a newly organized
institution located in the territory served by the Head Office of the Federal
Reserve Bank of Dallas, opened for business June 13, 1975, as a member of the
Federal Reserve System. The new member bank opened with capital of $300,000,
surplus of $300,000, and undivided profits of $400,000. The officers are: John J.
Tidwell, President, and Frederic W. Heinke, Vice President and Cashier.
New par bank

American State Bank, Fort Worth, Texas, a newly organized insured nonmember
bank located in the territory served by the Head Office of the Federal Reserve
Bank of Dallas, opened for business June 19, 1975, remitting at par. The officers
are: Elwood McKinney, President and Chief Executive Officer; Ross B. Hood, Jr.,
Vice President and Cashier; Greg Wilemon, Vice President (Inactive); Mildred
Bell, Assistant Cashier; and Joyce Byrom, Assistant Cashier.

Research Department
Federal Reserve Bank of Dallas
Station K, Dallas, Texas 75222

Federal Reserve Bank of Dallas
July 1975

Stat-IstlCal
- Supplement to the Business Review
Ptincip 11
slu
~ y because of prolonged
weeks ended June lB. Weakness in
As a result, natural gas has been
str~~~In.the aut.omobile and conloan demand was broadly based,
readily available to users in Texas,
Prim n Industnes, production of
even though production in the state although for the first time this year,
shar rY.metals in Texas fell
is declining. Where Texas consumed consumer loans rose about in line
By J~% In the first half of this year. about half its natural gas output
with seasonal expectations. The
third fr e, output had fallen about a
overall rise in total bank credit was
ten years ago, it now uses about
NOve born the peak reached in
smaller than the average increase in
three-fifths.
mer.
comparable periods of the past five
New
intrastate
gas,
the
price
of
A. signifi
r 'm alummum
.
Prod
. can t dop
years.
which is not regulated, has been
agg uctIon this year has been
• Reflecting sharp improvement in
selling for about $1.90 a thousand
fed cattle prices this spring, the
aut~:~~7d ?y weakness in the
cubic feet. By contrast, new interalutn' lIe Industry. Intermediate
number of cattle placed on feed in
state gas, which is regulated by the
beingInu.m produ~ts~ in addition to
Texas in May was 19 percent higher
Federal Power Commission, has
than in May 1974. But despite
are us~~ary buIldIng materials,
been selling for about 55 cents a
neh. cars In the manufacture of
increased placements, the number
thousand.
of head on feed on June 1 was down
Areas of the Eleventh District
Sharpi 1
BOO,OOO from the 1.9 million head a
nIinum hY ?wer demand for aluthat use interstate gas have been
year earlier.
Several as llnpacted on payrolls.
faced with shortages. Earlier this
clOse plants have been forced to
• The labor market in the five
year, for example, the utility comsUbstaant~ other facilities have made pany that supplies Tucson with gas southwestern states continued to
W n lallayoffs.
deteriorate in Mayas total employannounced a moratorium on new
eakness '
.
dential b . ~n commerCIal and resi- connections. And by granting a sub- ment declined more rapidly than
Output ~llding has also dampened
the civilian labor force. As a result,
stantial rate hike for gas serviceSOtne 0 other primary metals.
the unemployment rate reached 7.4
which enabled one utility company
steel bman ufacturers of reinforcing
to purchase intrastate gas-El Paso percent-up from 7.2 percent in
ll1uch ars have cut production as
narrowly forestalled a similar mora- April. The decline in employment
continued to be most severe for the
Prosas 40 percent .
torium.
construction industry and durable
ductio~~~ts ~or an upturn in proA large supplier of interstate gas
goods manufacturing, especially
second h Pntnary metals in the
has been meeting commitments by
'l'he boo~l~ of 1975 are not good.
buying gas from intrastate suppliers primary metals.
• Cash receipts from farm and
field equ ' In the ~anufacture of oil on a short-term basis. Strong searanch marketings in states of the
Which h Ipment (mcluding pipe)sonal demands or an economic
Eleventh District in the first four
~etals_:S bolstered the output of
recovery could strengthen the
lndicatin ppears to be slowing,
demand for gas, however, drying up months of this year were 27 percent
less than in the same period last
decline
that production could
short-term contracts.
Ord
rther.
year. The drop mainly reflected
Supplies
of
natural
gas
have
been
steep declines in prices for both
SUPPlyers to s t ee1 companies that
dwindling. In Texas, where slightly
ll1ent hProducers of oil field equipcrops and livestock and livestock
is
over
a
third
of
the
nation's
gas
A
<"\nd
onaVe
1 decl'lned in recent weeks. produced, output has fallen about a products.
• After advancing 1.B percent in the
Which he darge steel mill in Houston
fourth from peak levels in 1972.
previous three months, the conlast Yea: ~l~arge backlog of orders' And despite an increase in new
sumer price index for Dallas slowed
backlog bw~h have liquidated its
discoveries, production is continup
y e end of the summer.
in March-May, increasing 1.2 pering to fall.
cen t. Much of the rise in prices
roducers of
haVe
stemmed from higher costs for pribe
natural gas in Texas
Other
highlights:
as
en sell'
vate transportation-used cars and
POssible . In~ as much new gas
• Weekly reporting banks in the
advanta WIthIn the state taking
Eleventh District made substantial gasoline. The index was B.9 percent
higher than a year before.
faVors se~e .o~ a price struct~re that
acquisitions of Government and
VICIng intrastate markets.
(Continued
on back page)
municipal securities in the five
YV

CONDITION STATISTICS OF WEEKLY REPORTING COMMERCIAL BANKS

Eleventh Federal Reserve District

---

(Thousand dollars)
June 18,
1975

ASSETS
Federal funds sold and securities purchased
under agreements to resell ...............
Other loans and discounts, gross ....
Commercial and industrial loans
Agricuituralloans, excluding CCC
certificates of interest
Loans to brokers and dealers for
purchasing or carrying:
U.S. Government securities.
.............. " ..
Other securities .....
Other loans for purchasl',;'g"or'ciir,yiii
U.S. Government securities
Other securities ...
Loans to nonbank financial Institutions:
Sales finance , personal finance, factors ,
and other business credit companies
Other
..................... ,., ...... , ...
Real estate loans ............... ......................
Loans to domestiC commercial banks
Loans to foreign banks ...............
Consumer Instalment loans ....................
Loans to foreign governments, official
Institutions , central banks, and International
Institutions ......
Other loans .
Total Investments

g':'"

Total U.S. Government securities
Treasury bills ...................
Treasury certificates-of Indebtedness .
Treasury notes and U.S. Government
bonds maturing :
Within 1 year ..
1 year to 5 years ..
After 5 years ..................................................
Obligations of states and political subdivisions:
Tax warrants and short-term notes and bills
................... ,
All other ...
Other bonds, corporate stocks, and securities:
Certificates representing participations In
federal agency loans ..
.....
All other (Including corporate stocks) ...
Cash Items In process of collection .. ... " ...... ,', .....
Reserves with Federal Reserve Bank .. ...................
Currency and coin ...................................
Balances with banks In the United States
Balances with banks In foreign countries ..............
Other assets (Including Investments in subsidiaries
not consolidated)
TOTAL ASSETS ..

1,559,174
10,450,045

---5,018,132

May 14,
1975

June 12,
1974

1,506,733
1,945,167
10,471 ,306 10,256,438
5,061,594

4,579,648

185,575

190,645

263,734

1,222
23,332

200
27,488

1,263
48,915

2,023
380,454

2,226
388 ,179

3,851
447 ,382

164,997
581 ,738
1,501 ,380
64,651
86,180
1,110,718

134 ,961
588 ,353
1,519,107
63,532
91,618
1,101 ,941

145,976
754 ,637
1,529,214
46,037
70,939
1,045,389

0
1,329,643
5,035 ,123

3
1,301 ,459
4,834,296

127
1,319 ,326
4,212,632

1,393,359
269,433
0

1,264 ,325
199,797
0

956,514
114,035
0

221 ,202
757,047
145,677

227 ,914
686,426
150,188

136,Q28
529,747
176,704

105,948
3,202,443

104,958
3,106,125

177,564
2,792,375

12,420
320,953
1 ,493,004
1,236,541
131,110
604,511
53,201

5,450
353,438
1 ,486,942
1,090,545
131,038
448 ,955
24,761

9,920
276,259
1 ,500,440
804,057
130,515
446,925
35,438

1,025,563

859,586

----

991,421

----

Eleventh Federal Reserve District
(Million dollars)

ASSETS
Loans and discounts, gross .
U.S. Government obligations
Other securities ...................
Reserves with Federal Reserve Bank ....
Cash in vault ..............................................
Balances with banks In the United States
Balances with banks In foreign countrlese .
Cash items In process of collection ...
Other assetse ......
TOTAL ASSETSe
LIABILITIES AND CAPITAL ACCOUNTS
Demand deposits of banks .
Other demand depoSits .
Time deposits
Total deposits .
Borrowings .. ..
.................. ".
Other lIabllitlese ...........
......... " ...........
Total capital acco untse
TOTAL LIABILITIES AND CAPITAL
ACCOUNTSe
e-Estlmated

Totel demand deposits ....................................
Individuals, partnerships, and corporations
States and political subdivisions
U.S. Government ...............
Banks in the United States
.......... " ......
Foreign:
Governments, official Institutions, central
banks, and International Institutions
Commercial banks ................
Certified and officers' checks, etc.
Total time and savings depOSits
...
Individuals, partnerships, and corporations:
Savings deposits .........................................
Other time depoSits ......................
States and pOlitical subdivisions .......................
U.S. Government (Including postal savings)
Banks in the United States .............. .. ...
Foreign :
Governments, official Institutions. central
banks, and International Institutions .
Commercial banks .................................
Federal funds purchased and securities sold
under ag reements to repurchase ..
Other liabilities for borrowed money
Other liabilities ........
Reserves on loans ..........
...... , ..........................
Reserves on securities ....
Total capital accounts

June 4,
1975

Apr. 30,
1975

June 26,
1974

22,040
2,586
7,325
1,588
324
1,535
50
1,859
1,941

21 ,345
2,546
7,384
1,912
375
1,455
33
1,821
1,884

20,817
2,154
6,813
1,613
380
1,254
46
1,767
1,576

39,248

38,755

36,420

16,231,460 16,168,136 14601 ,92
.:...:--:
------7 ,048,2~~
7,467,365
7,628,346
5,461 ,930
490,626
56,108
1.280 ,492

62, 3
1,177,71

3,612
54 ,861
11 2,653
8,603,114

3,274
64 ,394
110,541
8,700,771

1 924
65:63t
112,093
7,553,72 2

1,342,203
4,582,817
2,275,037
9,630
366,180

1,297,828
4,667,454
2,343 ,225
9,724
353,872

1157,709
4'209,69 t
2'066,475
, 7177
86:087

23,240
4,007

23,161
5,507

2,925,722
54 ,199
633,455
202,566
22,165
1,484,563

2,902,332
56,864
631 ,504
202,722
22, 199
1,474,816

2871,2 64
,166,803
573.267
179,607
19,437
1 340,458
~

21,554 ,130 21,458 ,573

1,695
12,592
17,194

1,655
11,948
15,384

31 ,760
2,974
1,801
2,713

31 ,481
2,938
1,625
2,71 1

28,987
3,329
1,541
2,563

39 ,248

38,755

36,420

438'~45

13,261
13,322

=----

Eleventh Federal Reserve District
(Averages of dalty figures . Million dollars)

---

TIME DEPOSITS

DEMAND DEPOSITS

---

U.S.

Date

Total

Adjusted '

Government

Total

savings

1973: May
1974: May ............
June
July ......
Augus!.. .. .. ...
September.
October .
November ..
December
1975: January ........
February ......
March .
Aprlt ...
May .

13,136
13,553
13,742
13,809
13,634
13,740
13.687
13,843
14,351
14 ,180
13,956
14,114
14,247
14,106

9,502
9,880
10,030
10,056
9,988
9,973
9,976
10,148
10,355
10,353
10,245
10,349
10,572
10,374

341
278
240
212
175
222
149
138
208
166
150
165
213
195

13,336
15,148
15,333
15,442
15,509
15,586
15,714
16,016
16,177
16,842
17,052
17,177
17,196
17,303

2,8 59
2962
2'979
2:9 83
2,95 6
2952
2'97 7
3:009
3,049
3079
3'124
3'22 6
3'325
3:3 48

- -casn

1. Other than those of U.S. Government and domestic commercial bankS, leSS
Items In process of collection

RESERVE POSITIONS OF MEMBER BANKS

Eleventh Federal Reserve District
(Averages of dally figures . Thousand dollars)

1,935
12,478
17,347

5,189,8OIl

5,533 ,835
380,296
262,491
1 ,280,598

DEMAND AND TIME DEPOSITS OF MEMBER BANKS

19,752,764

CONDITION STATISTICS OF ALL MEMBER BANKS

June 12,
1974

May 14,
1975

Total deposits

TOTAL LIABILITI ES, RESERVES , AND
CAPITAL ACCOUNTS
.......................

21 ,554 ,130 21,458,573

Item

June 18,
1975

LIABILITIES

----------------------~ded
5 weeks ended
4 weeks ended
5 weekS ~~74

Item
June 4,1975
Apr. 30, 1975
J~
- - - - - -- -- -- - - - - - - - - - - - - - 1944,878

T°J:A~e~:~~~:lh~~~e;Ve·Bii,;k

~ :m:~~~

~:m:m

Currency and coin
Required reserves .. .. ..................
Excess reserves .... .. ....................

333,372
1,977,334
11 ,704

347,431
2.008,628
13,787

~~:~~~~~~;.;s

16:g;~

~:~~~

:624'~~i

1
1 ~~~:935
':' 19,057
126,241

---------------------------------------------

BANK DEBIT 5, END-Of-MONTH DEPOSITS, AND DEPOSIT TURNOVER

SMSA's'

Eleventh Federal Reserve District

_ Ollar amounts In th ousands, seasonally adjusted)
DEMAND DEPOSITS'

DEBITS TO DEMAND DEPOS IT ACCOUNTS'
Percent change

ARIZ~
_ ~;,;

~a~s=c~a~la:r~e:a

~b~a~S~IS~)

LOUI~I~A: Tucson

~~:~~;;~;~portA
· · ········::::::::::::::::::
Brownsvill
rthur-Orange .......

Bryan_Colie-Harlingen-San Benito .
Corpus Ch~I~~ Station ................... ..
CorSicana'
............................... ..
Dallas
........ .
EI Paso
Fort Wortii
Galveston i .............. ..
Houston - exas City

~ I een-Tempie

LU~~~~k "
..... .
MCAllen-Ph······ .. ·· ......... ..
Midland
arr-Edlnburg
Odessa .
.
San Ang~ l o . .
~an Antonio . .. .
Therman-Denison
....
exarkana (Tex A ·k· .. ·
.................. ..
T
W!~~
~s: . '. ..a.~.~.as) .
WIChlta 'Fail's" ................ ...

. ·· .

otal_30
~ers
1. Depo I

1~9~7~5~ ~~~
19%
10
23

11 %

$19,716,584
5,689,019
26,543,989
1,652,924
4,500,800
11,534,755
22 ,115,928
10,427,197
4,657,272
1,937,074
11 ,104,777
789,893
241,896,323
14,916,371
38,637,794
4,603,856
247,639,577
2,858,365
2.001,240
11,238.652
4,879,973
4,468,888
3,707,866
2,982 ,598
33,380,411
1,872,787
2,326,355
3,833,783
6,174,395
4,840,199

.................. ..
NA: Monroe
NEW ME
Shrevep;;;i'::
TEXAS' XICO: Roswell' ..
. Abilene
Amarillo ....

Annual rate
of turnover

May
May 1975 from
St d
1975
5 months,
ansta;ldtl etropolltan
(Annual-rate
Apr.
1M9a7Y4
1975 from
____
____________________
_______
__
______

- 6
17
9

8
7

- 4

6
14

18
4

- 8

12
12

- 2
- 7

- 1

- 13
13

- 12

- 7

- 6

- 12

13
9

- 5
- 4

- 9

14
28
21
38
12
10
9

- 4
- 6
2
- 6
- 3
5
- 2

.............................................................. $752,929,645

- 5%

Apr.

May

$383,228
133,745
368,454
62,544
158,266
277,361
452,490
349,241
142,193
60,805
335,366
43,928
3,302,040
349,783
984,753
152,872
4,111,846
128,464
74,873
244,056
178,948
219,908
141,090
104,648
940,127
89,269
92,755
148,637
170,553
185,759

43.5
72.8
28.8
29.9
43.7
53 .1
29.8
34.4
31 .8
34 .9
18.0
75.0
44.6
40.1
30.6
61.6
22.6
27.4
46.9
27 .7
20.4
27.0
29.5
36.1
21 .2
25.0
25.8
35.6
26.3

46.9
62.9
28.3
30.0
42.4
48.2
32.3
31.5
32 .0
39 .0
17.8
85 .7
49.1
43.3
34.7
65 .3
24 .5
31 .2
43.4
29.7
21 .6
26.5
31.4
37 .7
20.5
25.1
25.2
35 .3
27.7

40.5
57.1
28.7
26.8
47.6
45.4
31.4
31 .7
27.5
37.5
17.9
87.5
41 .6
43.0
30.1
58.8
21 .6
29.7
39.4
23.9
18.1
23.1
28.3
33.6
19.9
22.6
25.6
34 .9
27.6

$14,388,002

53.6

57 .3

54 .8

9
5
10

8
1

8
2
4

2
25
23
6
11
- 11

24
30
34
14
10

10%

May

- 6

May31,

11 %
9
20

10
14
18
10

2
- 4

1~9~7~4--------~19~7~5~----~19~7~5~----1~9~7~5------_1~9~7~4
____
45.2
47 .2
52 .3

2. Coun~Ytsbasis
of Individuals ,p artnershlps , and corporations and of states and political subdivisions

CONDITION Of
(Thousand

.........

THE fEDERAL RESERVE BANK Of DALLAS

BUILDING PERM ITS

dOllars)

VALUATION (Dollar amounts In thousands)

;:;;--item
Loa gold certifl
Oth ns to membacate reserves
Fed:~ I~ans ..... ~ banks .......
U.S Ga agencyoliil ..................
Talai overnme t gatlons ....
Memb~arblng a~s:t~Curitles ...... ........ ,', ..............

Fe~I~~~\ re:~~~e~~~~ '?;;poSlt'S

............... ,,"

~~~~ .a .ctual

VALUE Of CO
(Million d
............ollars)

Jun. 25,
1975
422 ,062
30,340
0
259,945
4,276,461
4,566,746
1,642,521
2.742,670

Jun. 26,
1974
470,160
75,871
0
112,626
3,508 ,905
3,697,402
1,612,911
2,514,054

May 21.
1975
422,062
0
0
263,884
4,311 ,707
4,575,591
1,972,160
2,705,572

NSTRUCTION CONTRACTS

---------------January-May

Area and
FIVE SOUT
typ e

May
1975

1Atfs
i1'Vs
1975
1974
~TATES, HWESTERN;----....:...--=~-~:.::.--~~~-~~-

N~~~
bUII(jin '" ... ...
Non
lIal bUII~'I 'n '" .... '"
UNITED ST
construct~~n .... ·
Resld
ATES
..
Nonreenllal buli(jin .......... ·.... ·
1

Nonbu~:gential
bull~·ln ....
Ing construc8~ii·..

1,691
366
618
707
9,143
3,073
2,877
3,193

1,724
410
596
718
9,598
3,029
2,987
3,582

1,167
325
619
223

~:~iri

2,402
....
1,856
NOTevlsed' oUlslana New M
SOU~: Details
'
exlco, Oklahom a, and Texas
CE: F. ...
may not add t
'Y . DOdge M GO totals because of rounding
. c raw-Hili , Inc.
.

r,:,,~rjzona L

6,022
1,600
2,481
1,941
35 ,134
11 ,522
12,539
11 ,074

4,791r
1,946r
1,895r
951
38 ,158r
15,637r
13,080r
9,441r

Percent chang e
May 1975
from

NUMBER

Area

May
1975

AR IZONA
577
Tucson ..
LOUISIANA
Monroe73
West Monroe ...
987
Shreveport.. ..
TEXAS
122
Abil ene ........
332
Amarillo .......
500
Austin ..
223
Beaumont ..
Brownsville ...... 130
Corpus Christi .. 250
Dallas ............... 1,960
56
Denison ..........
EI Paso ............. · 570
429
Fort Worth
45
Galveston
1,726
Houston ..
40
Laredo .
190
Lubbock ........
118
Midland
149
Odessa .....
Port Arthur ........ 119
58
San Angelo ......
San AntoniO ..... 1,557
35
Sherman
62
Texarkana
254
Waco ........
90
Wichita Falls .
Total-26 cities ... 10,652

5 months,
1975 from
1974

5 mos.
1975

May
1975

5 mos.
1975

Apr.
1975

May
1974

2,470

$6,298

$43,529

-71 %

- 36%

351
3,126

918
5,509

6,049
24,332

- 33
- 34

- 21
6

- 21
- 37

494
1,301
2,159
1,029
580
1,211
8,163
206
2,216
1,793
234
9,124
279
753
553
594
414
323
6,977
152
288
1,038
439

1,907
6,485
11,538
5,028
1,841
3,649
14,170
438
8,605
12,321
419
28,919
370
6,645
1,392
2,896
383
1,859
20,418
285
344
1,718
736

13,291
22 ,650
53,299
15,241
4,778
27 ,880
105,189
1,264
53 ,837
60,629
2,289
218 ,700
3,641
62,754
9,300
10,092
1,505
6,230
58,823
2,291
2,179
6,650
6,955

- 70
15
- 1'4
146
114
- 77
- 24
113
- 36
- 52
85
- 45
- 23
- 25
- 38
150
39
41
51
- 42
- 43
22
- 35

21
57
- 18
170
117
- 80
- 68
168
- 54
75
- 99
- 67
- 75
- 12
19
229
60
128
55
- 81
- 52
- 40
- 60

116
- 9
- 45
- 38
-62
- 13
- 33
51
- 41
- 30
- 92
-32
50
- 1
- 45
7
34
34
- 40
- 31
- 25
- 64
- 3

46,267

$145,091

$823,377

- 33%

- 46%

- 31 %

DAILY AVERAGE PRODUCTION OF CRUDE OIL

LABOR FORCE, EMPLOYMENT, AND UNEMPLOYMENT

(Thousand barrels)

Five Southwestern States'
Percent change from

Area
FOUR SOUTHWESTERN
STATES
Louisiana
New Mexico
Oklahoma
Texas

Gulf Coast
West Texas ...
East Texas (proper')
Panhandle
Rest of state
UNITED STATES

May
1975

Apr.
1975

May
1974r

5,902.1
1,840.5
256.3
448.9
3,356.4
649.8
1,798.6
214 .9
57.9
635.2
8,422.1

5,880 .5
1,800.0
260 .0
461.5
3,359 .0
650.3
1,796.3
217.7
58.0
636.7
8,389.4

6,324 .5
2,080.9
272.1
493.8
3,477.7
686.9
1,826.3
200.6
59.3
704 .6
8,902.9

Apr.
1975
0.4%
2.3
- 1.4
- 2.7
- .1
-.1
.1
- 1.3
- .2
-.2
.4%

(Seasonally adjusted)

May
1974
- 6.7%
- 11 .6
- 5.8
- 9.1
- 3.5
- 5.4
- 1.5
7.1
2.4
- 9.8
- 5.4%

r-Revlsed
SOURCES : American Petrol eum Institute
U.S. Bureau of Mines
Federal Reserve Bank of Dallas

Percenl change
May 1975 frorn

Thousands of persons
Item
Civilian labor force
Tolal employmenl
Total unemployment
Unemployment rate ..
Total nonagricultural wage
and salary employment
Manufacturing ..
Durable .
Nondurable .
Nonmanufacturlng
Mining ....
Construction
Transportation and
public utilities ....
Trade
Finance .:'
Service
Government

~
Apr.
1914

May
1975p

Apr.
1975

May
1974r

9,206.1
8,521.4
684.7
7.4%

9,240.0
8,572.3
667 .7
7.2%

8,997.5
8,569.0
428.4
4.8%

-0.4%
-.6
2.6
'.2

7,531 .7
1,242.2
695.2
546.9
6,289 .5
267.2
478.2

7,546.9
1,244.6
699.4
545.2
6,302 .3
266.5
487.7

7,507.4
1,315.5
740.4
575.1
6,191 .9
257.4
509 .6

-.2
-.2
-.6
.3
-.2
.3
- 1.9

502 .8
1,805.4
417.6
1,293 .3
8,521.4

504.6
1,807.7
417.4
1,294.7
8,572 .3

510.2
1.773.8
407.4
1,258.6
8,569.0

1975

INDUSTRIAL PRODUCTION

2.3"

_.6
59.S
'2.6

.3
_5.6
_6.1
_4.9
1.6

3.S

_6.2

- .4
-. 1
.1
-.1
-.6%

1. Arizona , Louisiana, New Mexico, Oklahoma, and Texas
2. Actual change
p-Prellmlnary
r-Revlsed
NOTE: Details may not add to totals because of rounding .
SOURCES : State employment agencies
Federal Reserve Bank of Dallas (seasonal adjustment)

___

_1 .5

I.B

2.5

:::"

------

(Seasonally adjusted Ind exes, 1967 - 100)

Area and type of Index
TEXAS
Total Industrial production
Manufacturing ..
Durable ....
Nondurable .
Mining
Utilities
UNITED STATES
Total Industrial production
Manufacturing ..
Durable .
Nondurable
Mining ................... .,
Utilities

May
1975p

Apr.
1975

Mar.
1975

May
1974

132.8
137.5
158.7
122.2
113.2
163.9

133.1
138.0
158.3
123.3
112.6
165.7

133.3r
138.4
157.9
124.3
112.9r
163.6r

140.4
145.6
160.4
134.9
117.8
178.9

109.2
107.3
101 .2
116.0
107.8
149.4

109.5
107.5
102.7
114.6
108.6
149.7

109.8
107.6r
103.0
114 .2r
109.3r
150.6r

125.7
125.7r
122.1r
130.9r
111 .0r
149.1r

TOTAL OIL WELLS DRILLED
Percent changfiorn

p-Prellmlnary
r-Revlsed
SOURCES : Board of Governors of the Federal Reserve System
Federal Reserve Bank of Dallas

• Measured by the value of construction contracts, building in the
five southwestern states has
increased sharply since the beginning of the year. Contracts in May
totaled $1.4 billion, more than twice
the level in January. Most ofthe
gain has been in total nonresidential construction, which also doubled. Construction of two electric
utility plants-each projected to
cost about $500 million-and manufacturing facilities on the Texas
Gulf Coast has boosted the volume
of contracts,

Area

FOUR SOUTHWESTERN STATES .
Louisiana .
Offshore
Onshore ...........
New Mexico ..
Oklahoma
Texas ............
Offshore ......
Onshore ......
UNITED STATES ......
SOURCE: American Petroleum Institute

• The number of cattle and calves
slaughtered in Texas in the first five
months of this year was 43 percent
higher than in the same period last
year. The gain stemmed from
increased marketings of cows and
grass-fed calves.

First
quarter
1975

quarter

2,090
224
45
179
115
403
1,348
0
1,348
3,738

1,498
185
58
127
64
211
1,038
1
1,037
2,590

Fourth
1974

~
Flrs l
Fourth
quarter
1974

14.4%
21.6
- 4.3
13.9
8.9
19.1
19.1
3.1%

quarter
1914

----39.5"
21 .1
_22.4
40.9
79.1
91 .0
29.9
30.0

Full text of Review (Federal Reserve Bank of Dallas) : July 1975

FRASER