The Texas manufacturing sector has been on the mend recently, but it remains to be seen if a new surge in coronavirus cases statewide — and the potential for more economic fallout — will derail the budding rebound.


The state production index, a barometer of manufacturing conditions in Texas devised by the Federal Reserve Bank of Dallas, reflects growth in the sector for the first time since the pandemic started hammering the state’s economy three months ago.


The positive June measurement of 13.6 marks a big turnaround from what have been starkly negative readings since March. In April, the index registered negative 55.6, its lowest point since compilation of the data began in 2004 — including during the last recession from 2007 to 2009.


The figure for June is indicative of "solid output growth this month," Dallas Fed senior business economist Emily Kerr said in a written statement. "The Texas manufacturing sector rebounded sharply in June after record declines prompted by the (coronavirus) pandemic."


The Dallas Fed compiles the index through anonymous surveys of manufacturing executives. Positive readings indicate expansion, while negative readings indicate contraction.


This month’s survey was conducted June 16-24, just as new coronavirus infections began escalating across the state. On June 25, Gov. Greg Abbott announced a pause in his efforts to jump-start the Texas economy from its pandemic-related deep freeze, and a day later he ordered all bars to close, after initially allowing them to reopen May 22.


A number of respondents to the Dallas Fed’s June survey — speaking before Abbott’s actions — voiced concern about the potential impact of a "second wave" of virus infections.


"The recent spike in COVID-19 numbers throughout Texas (since Memorial Day) is adding considerable uncertainty going forward," an executive of a machinery manufacturer told the Dalas Fed in the anonymous survey.


"Will there be a second wave?" another executive wrote.


Overall, however, the results of the latest survey reflected considerably more optimism among the state’s manufacturers than just a month ago.


"While we still are looking at many unknowns due to (the pandemic), demand is up for us sharply in the building materials business," one executive said. "It has surprised us and our distribution customers and their homebuilder customers."


Another respondent said price quotes for future sales have been climbing.


"We feel like they are foretelling better days ahead," the executive said. "Oil prices are rising, and we believe that business will return in the next six months to a more normal level."