NEW YORK - “Texas manufacturing activity remained soft in January,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas, released today.

The general business conditions index improved to negative 20.7 in Jauary from negative 23.9 in December.

The production index rebounded to positive 17.7 in January from negative 19.1 in December, while capacity use reversed to positive 10.6 from negative 17.4, the Fed reported. Volume of new orders increased to positive 1.7 from negative 7.9, while growth rate of orders index rose to negative 6.2 from negative 15.8.

Unfilled orders dipped to negative 9.8 from negative 6.1 in the prior survey, while the volume of shipments soared to positive 7.2 from negative 16.5, and delivery times gained to negative 2.7 from negative 4.3. The materials inventory index increased to negative 6.2 from negative 12.1, the finished goods inventory increased to negative 2.7 from negative 9.6. Prices paid for raw materials rose to 36.6 from 30.4, while prices received for finished goods grew to 12.5 from 11.3. Wages and benefits doubled to 30.9 from 15.8, while the number of employees index reversed to positive 7.1 from negative 7.0, and the average workweek index rose to negative 3.6 from negative 11.3, and the capital expenditures index slipped to negative 4.4 from positive 4.4.

As for future outlook (six months from now), the general business conditions index sank to negative 15.3 from negative 7.2 last month, the production index decreased to 27.7 from 34.2, while capacity use slid to 20.5 from 33.3, the Fed reported. Volume of new orders fell to 24.1 from 31.6, while growth rate of orders index declined to 13.3 from 21.2.

Unfilled orders dropped to negative 2.7 from positive 6.3 in the prior survey, while the volume of shipments dropped to 26.1 from 36.8 and delivery times fell to negative 2.7 from negative 1.8. Materials inventories decreased to negative 9.8 from positive 0.9, the finished goods inventory reversed to negative 8.0 from positive 3.5.

Prices paid for raw materials rose to 46.4 from 45.6, while prices received for finished goods slipped to 22.5 from 26.3. Wages and benefits fell to 33.9 from 45.6, the number of employees index dropped to 15.2 from 26.6, while the average workweek index slumped to 1.8 from 11.4, and the capital expenditures index fell to negative 0.9 from positive 10.6.

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.


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