Dallas Fed Manufacturing: Business Conditions Continued to Worsen in June

The Dallas Fed released its Texas Manufacturing Outlook Survey (TMOS) for June. The general business activity index rose for a second straight month but remained in negative territory at -12.7. This marks the fifth straight month of worsening business conditions.

Texas factory activity was largely unchanged in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held steady at 1.3, with the near-zero reading indicating a second month of flat output.

Other measures of manufacturing activity indicated a decline in June. The new orders index remained negative but edged up to -7.3 from -8.7. The capacity utilization index was largely unchanged at -1.0. The shipments index fell eight points to -7.3.

Perceptions of broader business conditions continued to worsen in June, though the indexes were slightly less negative than last month. The general business activity index inched up to -12.7, and the company outlook index edged up to -8.9. The outlook uncertainty index rose three points to 15.2.

Labor market measures suggested an increase in head counts but shorter workweeks this month. The employment index moved up two points to 5.7, with 18 percent of firms noting net hiring and 12 percent noting net layoffs. The hours worked index remained negative and fell five points to -8.4.

Elevated price pressures continued in June, while wage growth remained rather subdued. The raw materials prices index inched up to 43.0. The finished goods prices index rose 11 points to 26.1, its highest reading in nearly three years. Meanwhile, the wages and benefits index slipped further below average, to a reading of 13.4.

Press release