Dallas Fed sees activity grow slower in Feb.

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Texas factory activity growth, as measured by the production index, “continued to expand in February,” but at a slower pace than in January, according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

“Upward pressure on prices and wages continued in February,” according to the report.

The general business activity index climbed to 13.1 in February from 1.0 in January.

The production index slid to 10.1 from 14.5.

Capacity utilization fell to 7.1 from 14.8, the Fed reported. New orders slumped to 6.9 from 11.6, while growth rate of orders index gained to 3.4 from 1.2.

Unfilled orders grew to 0.7 from 0.2, while shipments decreased to 10.7 from 11.4, and delivery times narrowed to negative 1.3 from negative 2.3. The finished goods inventory plunged to negative 2.5 from positive 5.4. Prices paid for raw materials climbed to 21.8 from 21.2, while prices received for finished goods dipped to 5.2 from 6.4. Wages and benefits gained to 28.9 from 27.4, while the employment index rose to 12.6 from 6.6, and the hours worked index slid to 1.8 from 3.6, and the capital expenditures index gained to 18.7 from 16.0.

As for future outlook (six months from now), the general business conditions index jumped to 17.7 from 11.7 last month, the production index fell to 44.3 from 53.4, while capacity use decreased to 40.1 from 48.2, the Fed reported. New orders gained to 44.9 from 44.7, while growth rate of orders index slumped to 30.8 from 38.5.

Unfilled orders rose to 10.8 from 5.5, while shipments grew to 44.7 from 43.7, and delivery times jumped to 8.7 from 4.0. The finished goods inventory dropped to 5.4 from 8.6.

Prices paid for raw materials declined to 23.7 from 31.8, while prices received for finished goods slid to 25.9 from 26.7. Wages and benefits sipped to 47.0 from 47.7, the employment index declined to 33.2 from 39.4, while the hours worked index dropped to 11.4 from 15.6, and the capital expenditures index fell to 24.0 from 34.2.

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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