Dallas Fed manufacturing survey: Expansion slower but solid

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Texas factory activity, as measured by the production index, “continued to expand in November,” according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

The general business activity index fell to 19.4 in November from 27.6 in October.

The production index dropped to 15.1 from 25.6.

Capacity utilization decreased to 17.3 from 22.5, the Fed reported. New orders declined to 20.0 from 24.8, while growth rate of orders index rose to 18.1 from 12.3.

Unfilled orders climbed to 11.4 from 10.4, while shipments decreased to 16.7 from 20.9, and delivery times grew to 4.8 from 3.0. The materials inventory index slipped to 6.8 from 10.6, the finished goods inventory dropped to zero from 9.9. Prices paid for raw materials dipped to 32.2 from 32.3, while prices received for finished goods slid to 15.1 from 15.3. Wages and benefits declined to 14.2 from 22.5, while the employment index fell to 6.3 from 16.7, and the hours worked index slid to 11.5 from 13.7, and the capital expenditures index rose to 15.8 from 13.3.

As for future outlook (six months from now), the general business conditions index gained to 39.0 from 38.5 last month, the production index crept to 46.1 from 46.0, while capacity use declined to 45.4 from 47.2, the Fed reported. New orders gained to 48.9 from 45.3, while growth rate of orders index increased to 40.9 from 36.7.

Unfilled orders rose to 14.2 from 10.1, while shipments decreased to 43.2 from 50.8, and delivery times jumped to 3.8 from 0.5. Materials inventories soared to 13.2 from 3.7, and the finished goods inventory reversed to positive 6.2 from negative 0.9.

Prices paid for raw materials rose to 48.4 from 36.5, while prices received for finished goods surged to 35.8 from 18.9. Wages and benefits increased to 46.6 from 36.9, the employment index dropped to 29.8 from 34.2, while the hours worked index gained to 22.1 from 13.8, and the capital expenditures index rose to 34.1 from 30.2.

The Texas Manufacturing Outlook Survey is a monthly anecdotal survey of manufacturers in Texas. Over 100 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in May 2004.

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