By Xavier Fontdegloria
Growth in Texas manufacturing output kept pace in March but overall activity in the sector slowed compared with the previous month, according to a survey compiled by the Federal Reserve Bank of Dallas released Monday.
The production index of the Texas Manufacturing Outlook Survey–a key measure of state manufacturing conditions–decreased to 13.2 in March from 14.5 in February. The index signals that factory output increased slightly above its average, as a positive reading suggests expansion.
Overall activity in the factory sector also grew, but lost pace in March compared with the previous month, according to the survey’s data.
The index for general business activity–which assesses broader business conditions–fell to 8.7 from 14.0 the previous month, missing economists consensus of 13.0 in a poll by The Wall Street Journal.
Demand for goods expanded, though at a lesser pace than in the previous month. The new orders index fell to 10.5 from 23.1, its lowest reading in more than a year, and the growth rate of orders index was broadly steady at 13.7. The shipments index also declined, to 7.0 from 23.5 the previous month.
Labor market measures signaled that firms in the area continued to add to their workforce, with the employment index increasing to 25.5 from 18.4.
Supply-chains bottlenecks showed signs of worsening somewhat. The delivery times index increased to 23.2 from 21.4, while the unfilled orders index rose 12.4 from 7.7.
Price pressures remained elevated and near historical highs, the Dallas Fed said. The index which gauges the prices paid for raw materials was broadly unchanged at 74.0, and the index for finished goods prices rose to 47.8 from 44.6. The wages and benefits index increased to a new high of 55.2.
Companies were less optimistic about future business, according to the survey. The future general business activity index fell to 8.2 from 20.6, and the future production index decreased slightly to 40.1 from 42.1.
Write to Xavier Fontdegloria at [email protected]
