Dallas Fed Manufacturing: Business Conditions Continue to Worsen in April

The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for April. The latest general business activity index came in at -14.5, down from -14.4 from last month. This marks the 24th consecutive month the index has been in contraction territory. All figures are seasonally adjusted.

Here is an excerpt from the latest report:

Texas factory output strengthened slightly in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from -4.1 to 4.8.

Other measures of manufacturing activity were mixed this month. The new orders index remained negative, though it pushed up seven points to -5.3. The capacity utilization and shipments indexes turned positive this month, coming in at 4.2 and 5.0, respectively.

Perceptions of broader business conditions continued to worsen in April. The general business activity index held steady at -14.5—with the negative reading signaling worsening activity—and the company outlook index remained negative but moved up 10 points to -6.3. The outlook uncertainty index retreated six points to 17.3.

Labor market measures suggested flat employment and slightly shorter workweeks this month. The employment index edged down to a near-zero reading, suggesting no change in head counts. Fifteen percent of firms noted net hiring, the same as the share noting net layoffs. The hours worked index remained negative for a seventh month in a row but moved up six points to -2.3.

Wage pressures picked up this month, while price pressures retreated. The wages and benefits index pushed up 10 points to 30.6, a seven-month high and indicative of stronger-than-usual growth in compensation. The raw materials prices index retreated further below average, falling 10 points to 11.2. The finished goods prices index also fell, from 11.0 to 5.5.