For immediate release: November 24, 2008
Dallas Fed Survey: Texas Manufacturing Outlook Worsens
DALLAS—Texas manufacturing activity deteriorated further in November, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.
Texas produces more than 8 percent of the total manufactured goods in the United States, ranking second behind California in factory production.
Most indicators of current factory activity plunged sharply, the survey found. Several indexes for future production fell to their lowest levels since the survey started in June 2004, suggesting respondents expect continued deterioration in manufacturing activity over the next six months.
The general business conditions index revealed overwhelmingly negative sentiment with 64 percent of respondents reporting worsening conditions.
Indexes for production, capacity utilization, volume of shipments, unfilled orders and delivery time slid further into negative territory. The volume of new orders index plummeted to a record low, and over half of those surveyed reported decreases in the growth rate of new orders.
Consistent with overall weakness, wage and price pressures eased significantly this month. Indexes for raw material prices and finished goods prices, which were at record highs just a few months ago, dropped to record lows.
Inflation expectations remained subdued. The share of respondents anticipating decreases in future raw materials and finished goods prices outnumbered those expecting increases.
Indexes for future production, capacity utilization, growth rate of orders and volume of new orders dipped lower, with nearly a third of producers expecting decreases in these measures six months from now.
The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.
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