Dallas Fed: Factory Activity Declined at Slower Pace

NEW YORK - “The decline in Texas manufacturing activity slowed in April,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas, released today.

Most indicators of current factory activity ticked up, but remained overwhelmingly negative, “indicating manufacturers are still retrenching,” the Fed said.

The general business conditions index narrowed to negative 31.6 in April from negative 49.0 in March.

The production index rose to negative 8.9 from negative 22.3, while capacity use increased to negative 12.9 from negative 25.5, the Fed reported. Volume of new orders narrowed to negative 14.8 from negative 30.1, while growth rate of orders index rose to negative 22.7 from negative 35.9.

Unfilled orders climbed to negative 19.8 from negative 27.5 in the prior survey, while the volume of shipments jumped to negative 7.9 from negative 27.2, and delivery times narrowed to negative 14.9 from negative 20.4. The materials inventory index rose to negative 26.0 from negative 30.1, the finished goods inventory declined to negative 26.0 from negative 10.8. Prices paid for raw materials moved to negative 34.7 from negative 41.7, while prices received for finished goods climbed to negative 30.0 from negative 30.1. Wages and benefits bounced to zero from negative 7.8, while the number of employees index grew to negative 37.4 from negative 46.6, and the average workweek index increased to negative 27.0 from negative 43.6, and the capital expenditures index improved to negative 18.0 from negative 35.3.

As for future outlook (six months from now), the general business conditions index improved to negative 4.0 from negative 7.9 last month, the production index decreased to 13.0 from 13.9, while capacity use rose to 15.0 from 9.0, the Fed reported. Volume of new orders grew to 19.2 from 10.9, while growth rate of orders index grew to 14.1 from 6.0.

Unfilled orders rose to negative 5.1 from negative 11.1, while the volume of shipments increased to 18.2 from 10.9, and delivery times climbed to negative 14.2 from negative 16.8. Materials inventories improved to negative 17.2 from negative 23.8, and the finished goods inventory narrowed to negative 13.0 from negative 18.8.

Prices paid for raw materials reversed to positive 2.0 from negative 10.0, while prices received for finished goods gained to negative 11.1 from negative 21.8. Wages and benefits rose to 9.1 from 2.0, the number of employees index widened to negative 19.4 from negative 16.8, while the average workweek index gained to 5.0 from 1.0, and the capital expenditures index improved to negative 7.0 from negative 17.0.

The Texas Manufacturing Outlook Survey is a monthly anecdotal survey of manufacturers in Texas. Roughly 80 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in May 2004.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER