Texas manufacturing activity rose at a slower pace in May

Texas manufacturing activity rose at a slower pace in May, according to a survey released today by the Federal Reserve Bank of Dallas.

PRODUCTION: The production index — a key measure of manufacturing conditions — declined from 24.7 in April to 11 in May, but remained positive.

OTHER: Other manufacturing measures also slowed. The new orders index fell 17.5 points to its lowest level this year. The capacity utilization index declined 9.3 points, but remained slightly above its average level over the history of the survey. The employment index fell 16.8 points to its lowest level in nearly a year. Manufacturers continue to see pricing pressure: The index of prices paid for raw materials rose 16.1 points, while the index of prices received for finished goods fell 2.4 points.

COMMENTS: Manufacturers reported mixed results. “Business continues to grow, and we are almost at the point of turning some marginal business away,” one paper manufacturer said. But a food manufacturer said record high dairy prices are “significantly decreasing our margins.”

GENERAL BUSINESS: Perceptions of broader business conditions were less optimistic. The company outlook index dropped 19.3 points after rising sharply in April, but it was up strongly from negative territory a year ago. The indexes of general business activity and company outlooks for the next six months also decreased, but remained positive.

Thanks to the Dallas Morning News