Texas Factory Activity Sluggish in April, According to Dallas Fed Survey
For Immediate Release: April 28, 2008
DALLAS—Texas manufacturing activity remained sluggish in April, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
The April survey can be found at: http://dallasfed.org/data/outlook/2008/tmos0804.html
Texas produces more than 8 percent of the total manufactured goods in the United States, ranking second behind California in factory production.
Indicators for current conditions were little changed from March. The company outlook index improved, but the index for general business conditions moved slightly lower, according to the survey.
“There is a growing divergence between companies’ outlook for their own operations and that for general business activity. Company outlook has been flat since the middle of last year,” said Dallas Fed economist Fiona Sigalla. “But the perception of general business conditions continues to deteriorate.”
Indicators for production, capacity utilization and volume of shipments were slightly lower but positive in April. The index for volume of new orders slipped slightly from 11.8 to 8.1. The capital expenditures index remained positive and increased slightly.
Price pressures on raw materials are still intensifying with 71 percent of responding producers reporting increases in raw materials prices.
Sixty-five percent of responding factories expect raw materials prices to be higher six months from now. Thirty percent of firms reported higher finished goods prices.
Respondents continued to be pessimistic in their evaluations of general business activity. Thirty-six percent said conditions had worsened since March, pushing that index down from –22.7 to –23.4. The index has been negative for 10 months.
The perception of company outlook continued to be better than for general business activity. The company outlook index pulled into positive territory in April, rising to 1.8 from –5.4 in March.
During the week of April 15-18, manufacturers were asked questions about the impact of credit conditions on their firms. Of firms seeking credit, 14 percent reported difficulties in April compared to 24 percent in March.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.
Federal Reserve Bank of Dallas
Phone: (214) 922-5307