Dallas Fed sees elevated price pressure, growing wages
Texas factory activity, as measured by the production index, “expanded at a faster pace in February,” according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.
The general business activity index gained to 37.2 in February from 33.4 in January.
The production index increased to 27.0 from 16.8.
Capacity utilization rose to 19.6 from 14.5, the Fed reported. New orders slid to 25.3 from 25.5, while growth rate of orders index declined to 15.3 from 15.5.
Unfilled orders climbed to 11.5 from 7.1, while shipments increased to 32.1 from 27.1, and delivery times fell to 4.8 from 9.0. The finished goods inventory gained to 7.6 from zero. Prices paid for raw materials rose to 39.8 from 33.5, while prices received for finished goods climbed to 22.5 from 22.3. Wages and benefits soared to 32.2 from 23.3, while the employment index increased to 19.1 from 15.2, and the hours worked index gained to 16.3 from 13.4, and the capital expenditures index rose to 23.7 from 20.0.
As for future outlook (six months from now), the general business conditions index dropped to 40.6 from 44.5 last month, the production index fell to 46.0 from 51.6, while capacity use decreased to 45.9 from 46.4, the Fed reported. New orders slid to 49.6 from 51.2, while growth rate of orders index declined to 37.5 from 40.4.
Unfilled orders grew to 18.2 from 14.0, while shipments decreased to 44.4 from 50.2, and delivery times dropped to 2.8 from 5.7. The finished goods inventory fell to 5.9 from 11.7.
Prices paid for raw materials slipped to 43.0 from 44.0, while prices received for finished goods slumped to 31.6 from 36.2. Wages and benefits dropped to 49.7 from 56.9, the employment index plunged to 34.0 from 44.5, while the hours worked index climbed to 15.1 from 14.4, and the capital expenditures index rose to 39.6 from 36.2.
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.