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Dallas Fed Manufacturing survey shows activity expands at a slower pace

Texas factory activity continued to expand in September, according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

The production index, a key measure of state manufacturing conditions, fell six points to 23.3 from 29.3 in August, indicating output growth continued but at a slower pace than last month.

IFR Markets had expected a reading of 28.0 for September.
The Dallas Fed said that other indexes of manufacturing activity also suggested slower expansion in September.

The new orders index fell nine points to 14.7 in September from 23.9, its lowest reading in six months while the growth rate of orders index slipped to 11.5 from 19.9, also a six-month low. The capacity utilization index dropped to 21.6 from 25.2, while the shipments index fell five points to 20.8 from 26.0.

“Perceptions of broader business conditions remained positive this month, although outlooks were less optimistic and uncertainty increased further,” the Dallas Fed said.

The general business activity index edged down to 28.1 from 30.9. The company outlook index dropped nine points to 18.2 from 27.3, its lowest reading in more than a year. And a new index measuring uncertainty regarding companies’ outlooks moved up four points to a new high of 19.9 from 16.2.

The outlook farther out was also mixed. The expected production index for six months ahead declined to 43.7 from 46.6.

Data were collected Sept. 11 through Sept. 19 with 116 Texas manufacturers responding to the survey.

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