Texas factory activity, as measured by the production index, "declined in May after two months of increases," according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas, released Tuesday.
The general business activity index widened to negative 20.8 in May from negative 13.9 in April.
The production index dropped to negative 13.8 in May from positive 5.8 in April.
Capacity use fell to negative 11.0 from positive 8.2, the Fed reported. Volume of new orders reversed to negative 14.9 from positive 6.2, while growth rate of orders index widened to negative 14.7 from negative 0.7.
Unfilled orders slid to negative 9.3 from negative 8.8 in the prior survey, while the volume of shipments plunged to negative 11.5 from positive 7.1, and delivery times rose to negative 4.6 from negative 6.9. The materials inventory index rebounded to negative 2.5 from negative 2.9, the finished goods inventory decreased to negative 8.1 from zero. Prices paid for raw materials climbed to 12.4 from 5.5, while prices received for finished goods narrowed to negative 3.3 from negative 6.6. Wages and benefits increased to 21.8 from 16.7, while the employment index widened to negative 6.7 from negative 3.7, and the hours worked index fell to negative 11.8 from negative 1.0, and the capital expenditures index dropped to negative 6.6 from positive 1.6.
As for future outlook (six months from now), the general business conditions index slipped to negative 1.8 from positive 0.4 last month, the production index fell to 24.6 from 33.9, while capacity use slid to 25.7 from 35.3, the Fed reported. Volume of new orders declined to 24.0 from 32.6, while growth rate of orders index decreased to 10.2 from 22.4.
Unfilled orders rose to 2.1 from 1.8, while the volume of shipments slumped to 24.4 from 33.7, and delivery times widened to negative 4.4 from negative 2.5. Materials inventories slid to negative 6.7 from zero, and the finished goods inventory widened to negative 8.6 from negative 2.1.
Prices paid for raw materials dipped to 20.0 from 20.2, while prices received for finished goods increased to 3.8 from 2.1. Wages and benefits slipped to 31.4 from 33.8, the employment index declined to 2.7 from 9.4, while the hours worked index reversed to negative 4.4 from positive 14.6, and the capital expenditures index fell to 2.9 from 8.5.
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.
