By Xavier Fontdegloria
Texas manufacturing output slowed in April and overall manufacturing activity barely increased, a Federal Reserve Bank of Dallas survey showed Monday.
The Texas Manufacturing Outlook Survey production index – a key measure of manufacturing conditions in the state – fell to 10.8 in April from 13.2 in March, its lowest since January 2021. The reading suggests that the Factory production rose slightly, as indicated by a positive reading. expansion, but at a slower pace than the previous month.
Overall activity weakened markedly over the month, according to survey data. The general business activity index – which gauges broader business conditions – fell to 1.1 from 8.7 the previous month, the lowest level since July 2020 and below economists’ consensus forecast of 10 .0 in a Wall Street Journal poll.
The business outlook index fell to minus 5.5, its lowest level in two years, the Dallas Fed said.
Growth in demand has kept pace, according to the survey. The new orders index rose slightly to 12.1 in April from 10.5 the previous month, and the growth rate of the new orders index remained broadly unchanged at 13.0. The deliveries index rose from 7.0 to 11.8.
The employment index fell slightly from 25.5 to 24.6, but continued to signal widespread job creation among businesses in the region.
Supply chain bottlenecks persisted, with the lead time index declining slightly to 21.2 from 23.2 and the unfilled orders index declining to 10.5 from 12.4.
Inflationary pressures were high, but eased somewhat in April. The index that measures prices paid for raw materials fell to 61.5 from 74.0, its lowest level in more than a year, and the price index for finished goods fell to 43.5 from 47.8.
“The supply chain is in chaos right now. Everything keeps going up,” said one of the survey respondents and maker of plastic and rubber products.
Businesses in the region were less optimistic about the short-term outlook, with the future general business activity index falling to 1.8 from 8.2 the previous month, according to survey data. However, expectations for output, capital spending and employment remained solidly in positive territory, the Dallas Fed said.
Write to Xavier Fontdegloria at [email protected]