Dallas Fed: Texas manufacturing sees little growth, with production index near zero
April 24, 2023
DALLAS—Texas factory activity was flat in April after growing modestly in March, according to business executives responding to the Texas Manufacturing Outlook Survey.
“Texas manufacturing experienced lull in output growth in April, continuing the pattern seen so far this year of bouncing between little to no expansion,” said Emily Kerr, senior business economist at the Dallas Fed. “The new orders index continued to suggest a contraction in demand, though not as significant as the past couple of months. Employment growth remains fairly typical while wage growth remains elevated and even picked up this month. Outlooks worsened further, and uncertainty continues to climb.”
Key takeaways from this month’s survey:
- The production index inched down from 2.5 to 0.9, with the near-zero reading suggestive of no change in output from last month.
- The new orders index was negative for an 11th month in a row but moved up five points to -9.6.
- Labor market measures suggest moderate employment growth but a slight decline in work hours.
- Prices and wages continued to increase in April. The wages and benefits index moved up seven points to 37.6, a stubbornly elevated reading relative to its average of 21.0.
- The general business activity index dropped eight points to -23.4, its lowest reading in nine months.
- The company outlook index remained negative, ticking down two points to -15.6.
The Dallas Fed asked a series of special questions on labor market and credit conditions in the April Texas Business Outlook Surveys and heard back from 370 business executives (services and manufacturing) April 11-19.
“Just over half of Texas firms are currently trying to hire, and we’re seeing some relief in labor market tightness as significantly more contacts said the availability of applicants improved over the past month than worsened,” Kerr said. “We asked about firms’ ability to obtain financing and while most report having no difficulty, there was an uptick seen in the share reporting at least some difficulty, to about 35 percent.”
For more information visit DallasFed.org.
Federal Reserve Bank of Dallas