NEW YORK - “Texas’ factory activity continued to contract in March,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas, released today.

Most indicators of current factory activity ticked up, but remained overwhelmingly negative, The Fed said.

The general business conditions index narrowed to negative 49.0 in March from negative 57.3 in February.

The production index rose to negative 22.3 from negative 36.1, while capacity use increased to negative 25.5 from negative 37.2, the Fed reported. Volume of new orders narrowed to negative 30.1 from negative 41.2, while growth rate of orders index rose to negative 35.9 from negative 40.2.

Unfilled orders slipped to negative 27.5 from negative 25.8 in the prior survey, while the volume of shipments jumped to negative 27.2 from negative 38.1, and delivery times narrowed to negative 20.4 from negative 21.6. The materials inventory index fell to negative 30.1 from negative 22.7, the finished goods inventory improved to negative 10.8 from negative 12.4. Prices paid for raw materials moved to negative 41.7 from negative 35.1, while prices received for finished goods climbed to negative 30.1 from negative 31.9. Wages and benefits dipped to negative 7.8 from positive 3.1, while the number of employees index slid to negative 46.6 from negative 36.1, and the average workweek index decreased to negative 43.6 from negative 33.3, and the capital expenditures index improved to negative 35.3 from negative 42.7.

As for future outlook (six months from now), the general business conditions index improved to negative 7.9 from negative 31.6 last month, the production index increased to 13.9 from 6.3, while capacity use rose to 9.0 from 4.2, the Fed reported. Volume of new orders grew to 10.9 from 4.2, while growth rate of orders index grew to 6.0 from zero.

Unfilled orders rose to negative 11.1 from negative 11.5, while the volume of shipments increased to 10.9 from 6.3, and delivery times climbed to negative 16.8 from negative 22.9. Materials inventories improved to negative 23.8 from negative 22.1, and the finished goods inventory narrowed to negative 18.8 from negative 19.8.

Prices paid for raw materials rose to negative 10.0 from negative 17.7, while prices received for finished goods gained to negative 21.8 from negative 24.0. Wages and benefits slid to 2.0 from 4.2, the number of employees index narrowed to negative 16.8 from negative 21.9, while the average workweek index gained to positive 1.0 from negative 4.2, and the capital expenditures index improved to negative 17.0 from negative 24.2.

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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