NEW YORK - 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, released today.
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 from19.6.
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, 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, while the employment index rose to 11.5 from 9.8, and 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 future outlook (six months from now), the general business conditions index gained to 28.0 from 23.1 last month, the production index increased to 42.4 from 35.1, while capacity use gained to 37.1 from 33.0, the Fed reported. Volume of new orders climbed to 42.6 from 30.5, while growth rate of orders index rose to 29.4 from 26.2.
Unfilled orders decreased to 7.5 from 7.7, while the volume of shipments climbed to 40.2 from 28.7, and delivery times fell to negative 10.2 from negative 2.2. Materials inventories slipped to 1.9 from 13.0, and the finished goods inventory dropped to zero from 6.5.
Prices paid for raw materials decreased to 41.7 from 47.2, while prices received for finished goods grew to 18.7 from 16.5. Wages and benefits rose to 31.5 from 29.6, the employment index rose to 21.3 from 17.6, while the average workweek index dropped to 13.2 from 18.4, and the capital expenditures index increased to 13.8 from 9.9.
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.
