Dallas Fed Manufacturing Survey: Activity Grows

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

The general business activity index fell to 16.9 in March from 24.5 in February.

The production index grew to 18.6 from 16.7.

Capacity use decreased to 13.2 from 14.7, the Fed reported. Volume of new orders declined to 9.5 from 11.6, while growth rate of orders index grew to 3.2 from 2.0.

Unfilled orders fell to 0.1 from 0.7 in the prior survey, while the volume of shipments dropped to 6.5 from 12.2, and delivery times climbed to 10.1 from 5.8. The materials inventory index dropped to zero from positive 9.7, the finished goods inventory narrowed to negative 1.8 from negative 2.6. Prices paid for raw materials fell to 25.2 from 31.5, while prices received for finished goods dropped to 7.5 from 19.5. Wages and benefits inched up to 19.7 from 19.5, while the employment index slid to 8.4 from 9.6, and the hours worked index rose to 8.7 from 7.7, and the capital expenditures index slipped to 12.7 from 14.4.

As for future outlook (six months from now), the general business conditions index fell to 36.3 from 37.0 last month, the production index dropped to 44.8 from 46.4, while capacity use declined to 37.3 from 45.2, the Fed reported. Volume of new orders decreased to 45.1 from 51.0, while growth rate of orders index fell to 38.3 from 39.9.

Unfilled orders slid to 7.3 from 11.3, while the volume of shipments increased to 45.7 from 42.8, and delivery times fell to 4.9 from 6.1. Materials inventories declined to 4.4 from 6.2, and the finished goods inventory rose to 5.5 from 4.6.

Prices paid for raw materials gained to 42.5 from 36.4, while prices received for finished goods decreased to 25.5 from 31.5. Wages and benefits held at 45.0, the employment index fell to 28.4 from 38.9, while the hours worked index declined to 9.4 from 12.2, and the capital expenditures index dropped to 23.4 from 33.0.

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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