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Dallas Fed: Texas manufacturing mixed in April; nearly 40 percent of firms report using AI

DALLAS—Texas factory output strengthened slightly in April, while other measures of manufacturing activity were mixed, according to business executives responding to the Texas Manufacturing Outlook Survey.

“Survey measures of Texas’ manufacturing sector signaled slight production growth and flat employment in April,” said Emily Kerr, senior business economist at the Dallas Fed. “Firms’ perceptions of general business conditions continue to worsen, and outlooks are quite mixed.”

Key takeaways from this month’s survey:

  • The production index rose from -4.1 to 4.8.
  • The new orders index remained negative, though it pushed up seven points to -5.3.
  • Labor market measures suggested flat employment and slightly shorter workweeks this month.
  • Wage pressures picked up this month, while price pressures retreated.
  • The general business activity and company outlook indexes remained negative, though the company outlook index moved up 10 points to -6.3.

The Dallas Fed asked a series of special questions on artificial intelligence (AI) in the Texas Business Outlook Surveys and heard back from 363 business executives (services and manufacturing) April 16–24.

Key takeaways from the special questions:

  • Nearly 40 percent of Texas firms are currently using AI, and an additional 16 percent plan to use it within the next 12 months.
  • Among firms using AI, half are using generative AI, a type of AI that autonomously generates new content.
  • Marketing is the top use of AI, followed by business analysis and process automation.
  • Among firms using AI, two-thirds say it has not impacted employment.
  • Among firms noting AI changed employment, decreased employment was most common for low-skill positions, while an increase was most common for high-skill positions. The impact was more mixed for mid-skill workers.

“At firms where AI has impacted employment, it is more likely to change the type of worker needed than the number of workers,” Kerr said. “Firms said the top benefits of using AI were increased productivity and access to better or more timely information. Misinformation and privacy issues were top concerns.”

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Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857