2008 News Releases

For immediate release:
May 27, 2008

Media contact:
James Hoard
Phone: (214) 922-5307
e-mail: james.hoard@dal.frb.org

Texas Manufacturing Sluggish with Hints of Improvement,
According to Dallas Fed Survey

DALLAS—Texas manufacturing activity remained slow-paced in May amid hints of reviving optimism, according to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

The May survey can be found at: http://dallasfed.org/data/outlook/2008/tmos0805.html.

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

Indicators for current conditions were positive but slightly lower than April, and some producers indicated that high and rising selling prices were dampening sales.  

However, the company outlook index continued to improve, and the index for general business conditions—while still negative—rose to the highest level since October 2007.  

The capital expenditures index remained positive and continued to rise, reaching the highest level since November 2007.

Indicators for production, capacity utilization and volume of shipments were slightly lower but still positive in May.

Price pressures remain intense. The finished goods price index rose from 25.9 in April to 34.2 in May, with 37 percent of manufacturers reporting increases. Forty-five percent expect higher finished goods prices six months from now.

The raw materials index remained high at 67.3. Nearly 70 percent of responding factories report increases in raw materials prices, and 65 percent expect further price increases six months from now.

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

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