Manufacturing continues to recover in the Texas region. The Federal Reserve Bank of Dallas gave its Texas manufacturing outlook survey for the month of March, showing that manufacturing activity strengthened in Texas for the ninth consecutive month. To show how recent this data is: 115 firms responded between the dates of March 14 and March 22.

The one takeaway here is that the numbers by and large all remain in positive territory. That being said, the strength of these numbers shows that the growth is decelerating in many of the index components.

The production index rose by two points to 18.6, suggesting that manufacturing output growth picked up this month. Other measures of current manufacturing activity also indicated expansion in March.

The major components did show some declining readings, but all were solidly above the 0.0 level for an indication of growth. These were shown as follows:

• The new orders index inched down to 9.5.
• The growth rate of orders index rose to 3.2.
• The capacity utilization index fell to 13.2.
• The shipments index fell to 6.5.
• The general business activity index fell eight points but remained positive at 16.9.
• The company outlook index was largely unchanged at 17.9.

While this was the ninth consecutive month of growth for the production, March represented the sixth and seventh positive readings in a row for general business activity and company outlook indexes, respectively. Upward price pressures eased a bit in March, and wages continued to rise at about the same pace. Employment and pricing data were shown as follows:

• The employment index posted a third consecutive positive reading, but it fell from 9.6 in February to 8.4 in March.
• Some 19% of firms noted net hiring.
• Some 10% of firms noted net layoffs.
• The hours worked index moved up one point to 8.7.
• The raw materials prices index fell six points to 25.2, ending a five-month trend of rising readings.
• The finished goods prices index fell 12 points to 7.5.
• The wages and benefits index held fairly steady at 19.7 (almost 80% of firms noted no change in compensation costs).

Expectations regarding future business conditions continued to improve. The Dallas Fed said:

The indexes of future general business activity and future company outlook came in at 36.3 and 39.1, respectively, exhibiting mixed movements from their February readings but still solidly in positive territory. Most other indexes for future manufacturing activity slipped but remained positive.

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