Dallas Fed: Manufacturing Up for 7th Straight Month

Texas factory activity increased for the seventh month in a row in May, with the production index hitting its highest level in three years, according to the monthly business-activity survey conducted by the Federal Reserve Bank of Dallas and released yesterday.

The general business conditions index slumped to 2.9 in May from 21.1 in April.

The production index grew to 20.8 from 18.2, while capacity use dipped to 18.7 from 20.6, the Fed reported. Volume of new orders held at 15.8, while growth rate of orders index slumped to 9.1 from 19.6.

Unfilled orders decreased to 1.8 from 8.9 in the prior survey, while the volume of shipments inched up to 14.8 from 14.6 and delivery times rose to 6.4 from 4.3. The materials inventory index reversed to negative 4.6 from positive 2.2 and the finished goods inventory slipped to ­negative 8.3 from negative 6.5.

Prices paid for raw materials fell to 38.5 from 42.1, while prices received for finished goods slipped to 2.4 from 2.9. Wages and benefits increased to 16.7 from 16.3, the employment index rose to 11.5 from 9.8, the average workweek index dropped to 21.5 from 22.8, and the capital expenditures index improved to 4.7 from 1.1.

As for the future outlook, the general business conditions index gained to 28.0 from 23.1 in April, the production index increased to 42.4 from 35.1, and capacity use gained to 37.1 from 33.0, the Fed reported.

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