Federal Reserve Manufacturing Indexes Indicate Expansion

Manufacturing in Texas experienced a ninth month of expansion in March, according to the Federal Reserve Bank of Dallas. The production index in the Texas Manufacturing Outlook Survey gained two points to register 18.6. New orders were softer in March after an unusually strong February, dipping 2.1 points to 9.5. Shipments decreased 5.7 points to a reading of 6.5.The growth rate for new orders increased 1.2 points and has been increasing for the past three months. Unfilled orders were flat in March and delivery times increased. Inventories were unchanged for raw materials while finished goods inventories decreased.

Prices continued to increase for both inputs and outputs but at a slower pace in March. Indices for employment levels and hours worked remained positive and increasing at readings of 8.4 and 8.7, respectively.

The current index for general business activity was positive at 16.9 although falling 8 points in March. The company outlook compared to the previous month was up 0.3 points to 17.9.

Future indicators remained positive for company outlook (39.1) and general business activity (36.3), but most of the indicators forecasting conditions six months ahead lost some ground in March.

Fifth District Survey of Manufacturing Activity

Manufacturing conditions were described as “upbeat” in March by the Federal Reserve Bank of Richmond. Indexes for shipments and new orders both rose this month, as did backlogs. The composite Index for the Fifth District rose to 22 from 17 in February for its best reading since April 2010. Pricing pressure moderated some and inventory levels of finished goods and raw materials increased.

Employment levels, work week length and wages all received a boost in March.

Looking ahead six months, employment indices remained strong for the District, but shipments, new orders, and capacity utilization are expected to decrease. Future input pricing is expected to moderate somewhat while selling prices improve.