Dallas Fed Manufacturing Survey: Activity Expands

Texas factory activity, as measured by the production index, "continued to expand in July," according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas, released Monday.

The general business activity index dipped to 4.4 in July from 6.5 in June.

The production index slid to 11.4 from 17.1.

Capacity use dropped to 12.2 from 15.3, the Fed reported. Volume of new orders decreased to 10.8 from 13.0, while growth rate of orders index slipped to 2.7 from 7.1.

Unfilled orders widened to negative 2.7 from negative 0.4 in the prior survey, while the volume of shipments increased to 17.7 from 15.4, and delivery times reversed to negative 1.2 from positive 3.2. The materials inventory index slumped to negative 2.4 from positive 0.3, the finished goods inventory increased to negative 1.2 from negative 2.1. Prices paid for raw materials rose to 15.9 from 14.3, while prices received for finished goods improved to negative 1.0 from negative 2.1. Wages and benefits fell to 16.4 from 20.0, while the employment index grew to 9.3 from 0.2, and the hours worked index slipped to 1.3 from 4.8, and the capital expenditures index declined to 3.5 from 9.9.

As for future outlook (six months from now), the general business conditions index dropped to 9.6 from 14.7 last month, the production index increased to 42.0 from 40.6, while capacity use rose to 41.4 from 37.2, the Fed reported. Volume of new orders slid to 30.8 from 33.2, while growth rate of orders index fell to 23.1 from 26.3.

Unfilled orders reversed to negative 4.9 from positive 6.6, while the volume of shipments dipped to 36.2 from 36.9, and delivery times rose to positive 0.7 from negative 3.2. Materials inventories gained to zero 2.2 from negative 2.2, and the finished goods inventory rose to 1.2 from zero.

Prices paid for raw materials rose to 32.5 from 29.2, while prices received for finished goods decreased to 14.5 from 20.9. Wages and benefits slipped to 31.5 from 36.7, the employment index increased to 25.3 from 23.1, while the hours worked index jumped to 9.3 from 8.0, and the capital expenditures index fell to 14.5 from 18.9.

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.

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