By Dave Sebastian

Factory activity in Texas suddenly contracted in March, with executives' outlook on business conditions worsening as the coronavirus outbreak intensifies in the U.S., according to a new report about the state's industrial sector from the Federal Reserve Bank of Dallas.

The production index plummeted to -35.3 in the current month from 16.4 in February, the latest Texas Manufacturing Outlook Survey shows. The Dallas Fed conducts the monthly survey, which asks Texas business executives about conditions in the industrial sector.

The new orders index fell to -41.3, its lowest reading since March 2009 during the Great Recession, and the growth rate of orders declined to -44.9 from 3.6 a month ago.

The index for general business activity for March plunged to -70 from 1.2 in the prior month, and the company outlook index fell to -65.6 from 3.6. Those readings of business conditions were the lowest since the survey began in June 2004.

The index measuring uncertainty of companies' outlooks rose to 62.6 from 11.

Readings measuring capacity utilization and shipments fell to -33.4 and -33.8, respectively, their lowest readings since the Great Recession.

Capital expenditures also fell to -34.3 from 6.9.

The employment index fell to -23 from a near-zero reading in February, with 26% of firms noting net layoffs and 3% noting net hiring. The hours worked index fell to -22.4 from 2.1.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

March 30, 2020 11:08 ET (15:08 GMT)

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