Texas Manufacturing Activity Holds Steady in April

The general business activity index in the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas stood at -14.5 in April compared to -14.4 in March. It has been negative since May 2022. An increased 15.0% of respondents reported improved business activity this month while a higher 29.5% of respondents reported a worsening of conditions. The company outlook index of -6.3 in April compared to -16.2 in March, up from a low of -23.0 in May 2023. Data were collected between April 16-24 from 87 Texas manufacturers.

In the survey of current conditions, the production index rose to 4.8 this month from -4.1 in March. The shipments series improved to 5.0 after having been negative for 17 of the prior 18 months. The new orders growth rate rose to 3.8, its first positive reading since April 2022. The unfilled order series jumped to -5.9, its highest level since September of last year. The hours-worked reading rose to -2.3 from -7.9, up from -11.8 in January. The wages & benefits index surged to 30.6 from 20.4. Working the other way, the employment reading fell to -0.1 following two successive positive figures. A steady 14.6% of respondents reported more hiring while a higher 14.7% reported a decline.

Inflation indicators weakened this month. The index of prices received for finished goods fell to 5.5 compared to 11.0 in March, but has risen from a low of -6.7 in November of last year. A greatly lessened 14.2% of respondents reported raising prices while a reduced 8.7% reported lowering prices. The index of prices paid for raw materials fell to 11.2 this month from 21.1 in March and remained well below its 84.2 high in November 2021.

Expectations for future manufacturing activity improved. The future general business activity index of 7.9 compared to 1.3 in March. The future production index rose to 34.8, up from a low of 2.8 in April of last year. The future orders growth index rose to its highest level since March 2022. The future employment index rose to its highest level in nine months. The future hours-worked index series also surged. The expected wages & benefits reading eased slightly and remained well below its February 2022 high. The future capital spending measure eased slightly.

Each index is calculated by subtracting the percentage reporting a decrease in activity from the percentage reporting an increase. When all firms report rising activity, an index will register 100. An index will register -100 when all firms report a decrease. An index will be zero when the number of firms reporting an increase equals the number reporting a decrease. Data for the Texas Manufacturing Outlook, conducted by the Federal Reserve Bank of Dallas, can be found in Haver's SURVEYS database.