Dallas Fed sees elevated price pressure, as expansion slows in March
Texas factory activity, as measured by the production index, “continued to expand in March, albeit at a markedly slower pace than last month,” 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 21.4 in March from 37.2 in February.
The production index plunged to 12.7 from 27.9.
Capacity utilization declined to 9.6 from 19.6, the Fed reported. New orders fell to 8.3 from 25.3, while growth rate of orders index declined to 3.8 from 15.3.
Unfilled orders slid to 6.0 from 11.5, while shipments decreased to 9.3 from 32.1, and delivery times fell to 2.5 from 4.8. The finished goods inventory dropped to 1.8 from 7.6. Prices paid for raw materials rose to 41.4 from 39.8, while prices received for finished goods slipped to 18.5 from 22.5. Wages and benefits dipped to 22.9 from 32.2, while the employment index decreased to 10.8 from 19.1, and the hours worked index fell to 9.4 from 16.3, and the capital expenditures index declined to 17.7 from 23.7.
As for future outlook (six months from now), the general business conditions index dropped to 32.0 from 40.6 last month, the production index dipped to 45.7 from 46.0, while capacity use increased to 46.9 from 45.9, the Fed reported. New orders slid to 44.5 from 49.6, while growth rate of orders index declined to 34.1 from 37.5.
Unfilled orders slid to 16.4 from 18.2, while shipments gained to 48.4 from 44.4, and delivery times rose to 6.3 from 2.8. The finished goods inventory fell to 5.7 from 5.9.
Prices paid for raw materials soared to 50.5 from 43.0, while prices received for finished goods slipped to 28.7 from 31.6. Wages and benefits dropped to 48.9 from 49.7, the employment index rose to 34.3 from 34.0, while the hours worked index climbed to 18.9 from 15.1, and the capital expenditures index fell to 36.1 from 39.6.
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.