Texas Factory Activity Contracted in January for Ninth Straight Month -- Dallas Fed
January 30 2023 - 11:34AM
Dow Jones News
By Xavier Fontdegloria
Manufacturing activity in Texas continued to weaken in January,
posting its ninth contraction in as many months, highlighting
increasing demand headwinds for the region's factory sector.
The Federal Reserve Bank of Dallas said Monday that the index
for general business activity of the Texas Manufacturing Outlook
Survey rose to minus 8.4 in January from a revised minus 20.0 in
December. Economists polled by FactSet expected the indicator to
rise to minus 9.9.
The indicator suggests business activity in Texas contracted
over the month as the reading was negative, but also signals
activity declined at a softer pace than in December as the index
was closer to zero.
Meanwhile, the production index--a key measure of state
manufacturing conditions--decreased to 0.2 from 9.1 the previous
month, signaling that output broadly stagnated after increasing in
Demand continued to show signs of weakness, data from the survey
showed. The new orders index rose to minus 4.0 from minus 11.0 but
remained negative, and the growth rate of orders index fell further
to minus 12.3 from minus 9.3. Both the unfilled orders and the
shipments indexes posted negative values.
"We are seeing a slowdown in orders and clients unwilling to
hold additional inventory," said one respondent from the chemical
Despite faltering demand, firms in the area continued to expand
their workforce. The employment index rose to 17.6 from 13.6, well
above its historical average and with 31% of firms reporting net
hiring and 13% reporting net layoffs.
Price pressures were generally steady, the Dallas Fed said. The
raw materials prices index fell to 20.5 from 21.9, and the finished
goods prices index decreased slightly to 9.9 from 10.9.
Firms' views over the short-term outlook were mixed, the report
said. The future production index rose to 16.1 in January from
10.5, signaling that respondents expect higher output over the next
six months. However, the future general business activity index
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
January 30, 2023 11:19 ET (16:19 GMT)
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