Dallas Fed Manufacturing Survey: Activity Grows

Texas factory activity, as measured by the production index, "activity increased for the eighth consecutive month in February," according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

The general business activity index rose to 24.5 in February from 22.1 in January.

The production index grew to 16.7 from 11.9.

Capacity use increased to 14.7 from 9.1, the Fed reported. Volume of new orders decreased to 11.6 from 15.7, while growth rate of orders index slid to 2.0 from 6.7.

Unfilled orders fell to 0.7 from 5.2 in the prior survey, while the volume of shipments dropped to 12.2 from 15.8, and delivery times reversed to positive 5.8 from negative 5.4. The materials inventory index rose to positive 9.7 from negative 5.3, the finished goods inventory narrowed to negative 2.6 from negative 8.8. Prices paid for raw materials climbed to 31.5 from 30.8, while prices received for finished goods rose to 19.5 from 17.7. Wages and benefits declined to 19.5 from 20.8, while the employment index rose to 9.6 from 6.1, and the hours worked index fell to 7.7 from 9.1, and the capital expenditures index slipped to 14.4 from 16.3.

As for future outlook (six months from now), the general business conditions index fell to 37.0 from 43.7 last month, the production index dropped to 46.4 from 53.9, while capacity use declined to 45.2 from 49.9, the Fed reported. Volume of new orders decreased to 51.0 from 55.2, while growth rate of orders index fell to 39.9 from 48.4.

Unfilled orders slid to 11.3 from 16.6, while the volume of shipments decreased to 42.8 from 51.8, and delivery times gained to 6.1 from 4.4. Materials inventories grew to 6.2 from 3.7, and the finished goods inventory fell to 4.6 from 13.7.

Prices paid for raw materials dipped to 36.4 from 38.7, while prices received for finished goods decreased to 31.5 from 32.8. Wages and benefits rose to 45.0 from 42.5, the employment index crept to 38.9 from 37.7, while the hours worked index declined to 12.2 from 14.3, and the capital expenditures index gained to 33.0 from 26.6.

The Texas Manufacturing Outlook Survey is a monthly anecdotal survey of manufacturers in Texas. Over 100 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in May 2004.

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