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Texas Manufacturing Activity Contracts in Texas in March, Dallas Fed Survey Indicates
DALLAS – Data from the Federal Reserve Bank of Dallas’ closely watched Texas Manufacturing Outlook Survey revealed a contraction in factory activity for March. The latest figures, released Monday, offer insights into the state’s manufacturing sector. Key details from the report are outlined below.
Texas Manufacturing Index – March Report Details
The following provides a breakdown of the Dallas Fed Texas Manufacturing Index survey results, comparing March data with February. It’s important to note that only select indicators are seasonally adjusted.
Key Manufacturing Indicators:
- Production Index: Increased to 6.0 in March, compared to -9.1 in February, signaling expansion in output.
- Capacity Utilization Index: Indicated a decrease, registering at -2.3 in March, up from -8.7 the prior month, suggesting continued underutilization.
- New Orders Index: Remained slightly negative at -0.1 in March, a marginal improvement from -3.5 in February, pointing to stagnant order volumes.
- Growth Rate of Orders Index: Declined further into contraction territory at -8.1 in March from -7.5 in February, evidencing weakening order growth.
- Unfilled Orders Index: Showed a slight improvement but remained deeply negative at -8.3 in March, compared to -9.9 in February, reflecting ongoing order backlogs.
- Shipments Index: Expanded slightly to 6.1 in March, up from 5.6 in February, indicating increased delivery volumes.
- Delivery Time Index: Increased to 3.4 in March, a notable shift from -6.3 in February, suggesting longer lead times.
- Finished Goods Inventories Index: Rose to 7.2 in March from -9.1 in February, implying a build-up in completed product stocks.
Prices and Labor Market Indicators:
- Prices Paid for Raw Materials Index: Increased to 37.7 in March from 35.0 in February, indicating rising input costs.
- Prices Received for Finished Goods Index: Slightly decreased to 6.3 in March from 7.8 in February, suggesting some pressure on selling prices.
- Wages and Benefits Index: Remained relatively stable at 16.0 in March, compared to 16.7 in February, showing consistent labor compensation.
- Employment Index: Contracted further to -4.6 in March, down from -0.7 in February, signaling job losses in the sector.
- Hours Worked Index: Improved to -2.9 in March from -14.2 in February, but still indicated a decrease in work hours.
- Capital Expenditures Index: Fell to -0.6 in March from 8.6 in February, suggesting a decrease in investment plans.
Business Outlook:
- Company Outlook Index: Worsened to -10.7 in March from -5.2 in February, reflecting increased pessimism about future business conditions.
- General Business Activity Index: Fell further into negative territory at -16.3 in March from -8.3 in February, indicating a deteriorating broader business environment.
Important Note on Index Interpretation
Note: The Texas Manufacturing Index gauges factory activity within Texas. A reading above zero signifies expansion, while a reading below zero indicates contraction in the respective activity.