Texas factory activity growth, as measured by the production index, “continued in June, albeit at a slower pace than in May,” 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, declined 12 points to 23.3, signaling a deceleration in output growth,” according to the report.
The general business activity index grew to 36.5 in June from 26.8 in May.
The production index slumped to 23.3 from 35.2.
Capacity utilization fell to 21.7 from 32.2, the Fed reported. New orders climbed to 29.6 from 27.7, while growth rate of orders index slipped to 22.2 from 26.5.
Unfilled orders rose to 13.0 from 4.1, while shipments dropped to 25.5 from 39.5, and delivery times grew to 15.9 from 10.2. The finished goods inventory rebounded to positive 5.8 from negative 6.6. Prices paid for raw materials soared to 53.6, its highest reading since 2011, from 44.0, while prices received for finished goods rose to a 10-year high of 26.2 from 20.5. Wages and benefits increased to 31.4 from 24.3, while the employment index climbed to 23.9 from 23.4, and the hours worked index declined to 20.2 from 23.2, and the capital expenditures index rose to 23.8 from 21.7.
As for future outlook (six months from now), the general business conditions index gained to 35.9 from 30.0 last month, the production index fell to 47.0 from 58.0, while capacity use decreased to 46.5 from 51.0, the Fed reported. New orders slid to 47.0 from 48.5, while growth rate of orders index remained at 37.7.
Unfilled orders surged to 24.5 from 13.8, while shipments remained dipped to 43.9 from 49.2, and delivery times fell to 6.8 from 13.4. The finished goods inventory slid to 7.2 from 11.9.
Prices paid for raw materials declined to 49.0 from 51.9, while prices received for finished goods gained to 28.1 from 27.0. Wages and benefits climbed to 53.2 from 50.6, the employment index rose to 39.8 from 37.6, while the hours worked index declined to 9.7 from 13.9, and the capital expenditures index gained to 33.9 from 32.2.
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.