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Texas Factory Activity Accelerates Sharply in March — Dallas Fed - Morningstar.com

By Maria Martinez

 

Manufacturing activity in Texas expanded at a markedly faster pace in March than in the previous month, reaching the highest reading in the 17 years of history of the Texas Manufacturing Outlook Survey.

The production index of the Texas Manufacturing Outlook Survey, a key measure of state manufacturing conditions, came in at 48.0 in March, up from 19.9 in February and indicative of a sharp acceleration in output growth.

In the survey, researchers at the Federal Reserve in Dallas ask Texas executives about a range of conditions in the industrial sector. They are asked whether certain parameters such as output, employment or orders increased, decreased or remained unchanged over the previous month.

March's reading signals that factory activity expanded for the tenth consecutive month and at a much quicker pace than that of February.

In line with the production index, the index for general business activity posted another double-digit increase, rising 12 points to 28.9 in March.

Other measures of manufacturing activity also point to sharply faster growth in March, the Dallas Fed said.

The new orders index rose 18 points to 30.5, and the growth rate of orders index climbed 11 points to 22.7.

The capacity utilization index climbed to 46.1 from 16.5, while the shipments index rose 17 points to 33.1.

Labor market measures indicated robust growth in employment and work hours. The employment index came in at 18.8, up from 12.7 and well above average, with 29% of firms noted net hiring, while 10% noted net layoffs. The hours worked index doubled from 11.3 to 23.4.

The raw materials prices index rose to 66.0 from 57.4, amid continued reports of supply-chain disruptions driving up costs, the report said. The finished goods prices index climbed nine points to 32.2, its highest reading since 2008. The wages and benefits index posted a double-digit increase, rising 12 points to 28.0.

Expectations regarding future manufacturing activity remained positive in March. The future production index was largely unchanged at 38.3 and the future general business activity index held steady at 33.7. Other measures of future manufacturing activity showed mix movements but remained solidly in positive territory.

 

Write to Maria Martinez at maria.martinez@wsj.com

 

(END) Dow Jones Newswires

March 29, 2021 11:14 ET (15:14 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.

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