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

The general business activity index slid to 15.0 in June from 17.2 in May.

The production index declined to 12.3 from 23.3.

Capacity utilization decreased to 12.3 from 19.4, the Fed reported. Volume of new orders dropped to 9.6 from 18.1, while growth rate of orders index plunged to 4.7 from 12.3.

Unfilled orders fell to 1.3 from 8.1, while the volume of shipments decreased to 8.5 from 24.7, and delivery times dropped to zero from 2.7. The materials inventory index rose to negative 1.6 from negative 2.3, the finished goods inventory widened to negative 7.1 from negative 1.8. Prices paid for raw materials fell to 15.6 from 17.5, while prices received for finished goods slipped to 3.6 from 5.9. Wages and benefits dropped to 21.1 from 24.3, while the employment index gained to 9.6 from 8.3, and the hours worked index fell to 8.9 from 15.7, and the capital expenditures index rose to 12.7 from 11.1.

As for future outlook (six months from now), the general business conditions index crept to 31.9 from 31.6 last month, the production index dropped to 47.5 from 49.7, while capacity use slid to 42.9 from 43.6, the Fed reported. Volume of new orders increased to 52.6 from 46.5, while growth rate of orders index fell to 35.7 from 36.4.

Unfilled orders fell to 10.4 from 12.9, while the volume of shipments decreased to 45.0 from 46.6, and delivery times declined to 0.9 from 6.6. Materials inventories jumped to 14.9 from 4.6, and the finished goods inventory rose to 7.4 from 5.5.

Prices paid for raw materials plunged to 18.5 from 28.7, while prices received for finished goods sank to 15.9 from 30.5. Wages and benefits crept to 44.7 from 42.7, the employment index fell to 32.3 from 43.1, while the hours worked index dropped to 8.3 from 12.0, and the capital expenditures index grew to 25.2 from 24.8.

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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Gary Siegel

Gary Siegel

Gary Siegel has been at The Bond Buyer since 1989, currently covering economic indicators and the Federal Reserve system.