For this month’s Dallas Federal Reserve survey, Texas business executives were asked supplemental questions on supply-chain disruptions. Results for these questions from the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey have been released together. Read the special questions results.
Texas factory activity continued to increase but at a slightly slower pace in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in at 14.5, down two points from January but still indicative of above-average output growth.
Other measures of manufacturing activity also indicated continued growth. The new orders index pushed up three points to 23.1, while the growth rate of orders index held steady at 12.6. Both readings are significantly above average. The capacity utilization index was unchanged at 11.5, and the shipments index rebounded 15 points to 23.5 after its January drop.
Perceptions of broader business conditions improved in February. The general business activity index shot up 12 points to 14.0. The company outlook index rose to a lesser extent, moving up four points to 6.4. The uncertainty index was elevated at 17.0 but down 14 points from last month’s reading.
Labor market measures indicated robust employment growth and longer workweeks, though some moderation was seen in February. The employment index came in at 18.4, down nine points from January but still highly elevated. Twenty-seven percent of firms noted net hiring, while 9 percent noted net layoffs. The hours worked index edged down to 19.0.
Prices and wages continued to increase strongly in February, with the indexes near historical highs. The raw materials prices index pushed up 11 points to 73.4, and the finished goods prices index rose eight points to 44.6. The wages and benefits index moved down from 49.6 to 44.0, still more than double its average reading of 19.8.
Expectations regarding future manufacturing activity pushed higher in February. The future production index rose from 38.0 to 42.1, and the future general business activity index came in at 20.6, up four points from January. Other measures of future manufacturing activity such as capital expenditures and employment showed mixed movements but remained solidly in positive territory.
(Courtesy Dallas Federal Reserve)