The Dallas Fed is clearly surpassing the Philly Fed as the very hottest of the regional and private manufacturing surveys. Dallas' general activity index jumped to 37.2 in February, easily above Econoday's high estimate and the strongest reading of the post-2008 expansion.
Shipments, at 32.1, are also at an expansion high but stress is the building indication from this report as unfilled orders continue to pile up, rising to an unusually strong 11.5 this month. Unfilled orders will continue to build based on incoming orders which are steady and very strong at 25.3. Capacity utilization is up, delivery times continue to slow, and prices look like they may be overheating, especially wages and inputs but also including selling prices where traction is strong and at an expansion high.
Growth in hiring, up in January to 19.1, is still keeping pace but continued demand would raise questions about the region's available labor supply. Respondents in small-sample reports, like this one from Dallas, continue to report far stronger conditions than those tracked in definitive factory data where growth has been uneven and, as yet, moderate.
February's consensus for the Dallas Fed general activity index is 31.0 which would mark little change from January's extremely robust 33.4. Unsustainable strength is the risk with this sample as new orders keep pouring in, unfilled orders continue to build, and manufacturers in the region, facing long delivery delays and rising work hours as well as elevated prices, may have trouble keeping up with demand.