Dallas Fed Manufacturing: Business Conditions Continue to Worsen in March

The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for March. The latest general business activity index came in at -14.4, down from -11.3 from last month. This marks the 23rd consecutive month the index has been in contraction territory. All figures are seasonally adjusted.

Here is an excerpt from the latest report:

Texas factory activity weakened in March after stabilizing in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell five points to -4.1, a reading that suggests a slight decline in output month over month.

Other measures of manufacturing activity also indicated declines this month. The new orders index—a key measure of demand—dropped 17 points to -11.8 after briefly turning positive last month. The capacity utilization index edged down five points to -5.7, and the shipments index plunged from 0.1 to -15.4.

Perceptions of broader business conditions continued to worsen in March. The general business activity index edged down from -11.3 to -14.4, and the company outlook index slipped from -8.5 to -16.2. The outlook uncertainty index moved up 12 points to 23.0, a six-month high.

Labor market measures suggested slower job growth and shorter workweeks this month. The employment index remained positive for a second month in a row but fell four points to 1.5. Fifteen percent of firms noted net hiring, while 13 percent noted net layoffs. The hours worked index remained negative for a sixth month in a row and held fairly steady at -7.9.

Wage and prices increased this month. The wages and benefits index held steady at a near-average reading of 20.4. The raw materials prices index remained below average but moved up from 15.4 to 21.1. The finished goods prices index climbed to 11.0 after two near-zero readings, suggesting a resumption in selling price growth.