April 29, 2024
Texas manufacturing indicators mixed in April
What's new this month
This month's survey asked Texas business executives additional questions about artificial intelligence (AI). Results for these questions from the Texas Manufacturing Outlook Survey, Texas Services Sector Outlook Survey, and Texas Retail Outlook Survey were released together. Read the results of the special questions.
Factory output in Texas rose slightly in April, according to business executives who responded to the Texas Manufacturing Outlook Survey. The production index, an important indicator of the status of the state's manufacturing industry, rose from -4.1 to 4.8.
Other indicators of manufacturing activity were mixed this month. Although the new orders index increased by 7 points to -5.3, it remained negative. Capacity utilization rate and shipment index turned positive this month, at 4.2 and 5.0, respectively.
Perceptions of broader business conditions continued to deteriorate in April. The General Business Activity Index held steady at -14.5, with negative readings indicating deterioration in activity – the Business Outlook Index remained negative, but rose 10 points to -6.3. The outlook uncertainty index decreased by 6 points to 17.3.
Labor market indicators suggested flat employment and a slight contraction in weekly working hours this month. The employment index fell to near zero, suggesting no change in the number of employees. Fifteen percent of companies noted net hiring, which was the same as the percentage of companies that noted net layoffs. The working hours index, which has been negative for seven consecutive months, rose by 6 points to -2.3.
Wage pressures have increased this month, while price pressures have receded. The wage and benefits index rose 10 points to 30.6, the highest level in seven months, indicating stronger-than-usual compensation growth. The raw material price index was further below average, dropping 10 points to 11.2. The finished goods price index also fell from 11.0 to 5.5.
Expectations for future manufacturing activity improved in April. The future production index increased little by little to 34.8, and the future general enterprise activity index increased from 1.3 to 7.9. Other indicators of future manufacturing activity also turned positive this month.
Next release: Tuesday, May 28th
Data was collected April 16-24, and 87 of the 127 Texas manufacturers surveyed submitted responses. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state's factory activity. Businesses are asked whether production, employment, orders, prices, and other metrics have increased, decreased, or remained the same compared to the previous month.
Survey responses are used to calculate the index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage of respondents reporting an increase. If the share of companies reporting an increase exceeds the share of companies reporting a decrease, the index is greater than zero, indicating that the index has increased compared to the previous month. If the share of companies reporting a decrease is greater than the share of companies reporting an increase, the index is below zero, suggesting that the indicator has decreased compared to the previous month. If the number of companies reporting an increase is equal to the number of companies reporting a decrease, the index is zero. Data are seasonally adjusted where appropriate.
