Texas factory activity, as measured by the production index, continued to expand at a slower pace in May than in April, according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas and released Tuesday.

The general business activity index decreased to negative 5.1 in May from negative 3.4 in April.

The production index dipped to 5.5 from 5.6, while capacity use increased to 5.0 from 1.4, the Fed reported. Volume of new orders improved to negative 0.6 from negative 1.0, while the growth rate of orders index declined to negative 3.7 from negative 2.6.

As for future outlook, the general business conditions index sank to 4.3 from 15.7 in April, the production index decreased to 31.6 from 38.5  and capacity use slipped to 29.1 from 34.9, the Fed reported.

Volume of new orders fell to 22.8 from 31.4, while the growth rate of orders index decreased to 13.7 from 21.1.

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