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For immediate release: March 30, 2009

Texas’ Factory Activity Remains Weak But Outlook Turns Up Slightly

DALLAS—Texas factory activity continued to contract in March, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey; however, several key indexes of future activity showed signs of slight improvement.

Indexes for production, capacity utilization, new orders and shipments ticked upward but remained negative, according to the survey.

Texas produces more than 8 percent of the total manufactured goods in the United States, ranking second behind California in factory production.

The business activity index, the survey’s broadest measure of state manufacturing trends, revealed widespread downbeat sentiment. Fifty-three percent of respondents reported worsening market conditions, and 43 percent indicated no improvement from the prior month.

Several indicators of future activity suggest the region’s manufacturers expect declines in factory activity to ease over the next six months. Indexes for future production, capacity utilization, shipments, new orders and growth rate of orders improved modestly for the fourth consecutive month, and 40 percent of manufacturing executives foresee increases in production six months from now.

Manufacturers continued to report downward prices pressures. Fifty percent noted falling input prices, and 34 percent cited lower prices for their goods.

The index for raw materials prices over the next six months remained negative, and manufacturers expecting declines in finished goods prices outnumbered those foreseeing increases.

The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity.


Media contact:
James Hoard
Phone: (214) 922-5307