Texas manufacturing output accelerates, but business activity slips

(Sharecast News) - Manufacturing output growth across Texas picked up pace in April, according to a closely followed survey from the Dallas Federal Reserve, though business activity levels slipped over the month.

The Texas Manufacturing Outlook Survey, which collects responses from manufacturing executives across the state, showed a jump in the production index to 19.0 from 6.8 the month before, which the Dallas Fed said suggested "an above-average pace of output expansion".

There were other positive signs, with the capacity utilisation index up 13 points at 19.8, the new orders index rising 4 points to 9.9 and the shipments index up 13 points at 15.0.

However, broader business conditions were more mixed during April, with the general business activity index down 2 points at -2.3, though improvements were noted in the company outlook and uncertainty index.

Employment continued to be flat, the Dallas Fed said, but workweeks were slightly longer. Meanwhile, price pressures rose with the finished goods prices index at its highest since July 2022, while wage pressures were little changed.

Among the "special questions" asked in this month's survey was about how the Iran war has affected business, with 16% and 31% of execs experiencing a significant and slight negative impact so far, respectively.

Some 46% said they had seen no impact yet, though 34% said they expect an impact if the war continues. Meanwhile, 7% of firms noted a positive impact, though this was partly as result of increased activity in the oil and gas sector.