- Prior was -0.2
- Output +19.0 vs +6.8 prior
- New orders +9.9 vs +6.1 prior
- Prices paid 37.0 vs 32.7 prior
- Employment -0.9 vs -1.0 prior
- Prices received 14.9 vs 5.9 prior
- Wages and benefits 14.3 vs 14.6 prior
- The finished goods prices index jumped nine points to 27.6, its highest level since July 2022
This is a much better-than-expected print on the activity side. Production jumped more than 12 points to 19.0, capacity utilization did basically the same thing, and shipments ripped from a near-flat 1.8 to 15.0. Those are big moves and they suggest Texas factories actually had a pretty good April once you get past the noisy headline. The general business activity index slipped a touch further into negative territory at -2.3, but the company outlook flipped positive and uncertainty came down meaningfully — firms are feeling better about themselves even if they're still cautious on the broader picture.
The catch, as always lately, is prices, which continue to rise.
Employment is still a touch negative and capex came off a little, so this isn't a full-throated boom. But for a regional survey that's been muddling along near zero for months, the production and shipments numbers are the standout. The trouble is the Fed has to look at finished-goods pricing this hot and decide whether the activity rebound is the story or the inflation pulse is.
The comments are worth a scroll. The aluminum extruders are cheering Section 232 clarifications. The printers are, in their words, watching demand go "slower than we can recall in many years." A food manufacturer flags "the long-term effect of the closure of the Strait of Hormuz is yet to be felt" — which is the kind of sentence you really don't want showing up in a regional Fed survey.
Beverage and tobacco product manufacturing
- We are starting to see some upward pressure on prices, especially with food and anything with a significant energy cost component.
Fabricated metal product manufacturing
- Middle East conflict, and fuel prices add uncertainty to economic and demand outlook.
- April has returned back to flat, just as January and February were.
Food manufacturing
- Feeling good about the economy right now based on orders and future business.
- Continued decline in consumer segment purchasing power as well as disarray at the federal level is impacting our customers, input costs, supply chain and financial viability. The long-term effect of the closure of the Strait of Hormuz is yet to be felt.
Machinery manufacturing
- Times are good, backlog is building, prices are firm and life is better! Thank the Lord for proactive leaders who understand business, deals and the economy. We are having many new business opportunities, and it appears from our perspective that the economy is starting to improve.
Nonmetallic mineral product manufacturing
- Diesel fuel cost increases are raising transportation cost for finished goods and raw materials. If they persist, we will have to raise prices. We are currently absorbing the cost.
Paper manufacturing
- Prices of main raw materials are experiencing a 4-6 percent increase that will push an increase in our selling prices 30 days from now. Demand does not seem to warrant these coordinated increases for our suppliers.
Plastics and rubber products manufacturing
- The geopolitical and war-related issues have significantly increased our costs and delays in our supply chain as unusual supply chain ramifications create havoc. Our retail supply business is very vulnerable at this time. The unpredictable future is challenging, to say the least.
Primary metal manufacturing
- President Trump’s proclamation a couple of weeks ago on Section 232 tariffs cleared up ambiguity in the language that had allowed some importers of aluminum to avoid paying the 50 percent tariff on the full value of covered aluminum products. That clarification has already increased quoting activity with several companies, the majority of them in the building and construction industry, as they begin evaluating onshoring suppliers back into the United States. Our quote activity, along with new orders, has increased tremendously. The industry’s efforts to protect and grow U.S. aluminum extrusion manufacturing jobs are beginning to show results. Our industry focus now shifts to the USMCA renewal. If Mexico and Canada are granted exemptions from Section 232 tariffs, it could be very detrimental to domestic producers, leading to lost jobs and potentially plant closures. China and other Asian countries, along with Europe and South America, based on history, will use Mexico as a pathway to enter the U.S. market at lower tariff ratesWe are actively working to ensure that does not happen again.
Printing and related support activities
- We are getting busy because of work we normally do this time of year. As mentioned in the prior reports, demand has been slow for most of this calendar year. We are very worried about the short-term and long-term effects of the Iran conflict and the chaos and unpredictability coming out of Washington. Inflation is barreling full steam into prime rate increase territory, and no telling when fuel prices will return to where they were. [Demand] continues to be soft and slow, something we credit to the uncertainty in our economy right now.
- Demand has been considerably slow, slower than we can recall in many years. We continue to believe it’s from the chaos and confusion coming out of Washington. In addition, now with the Iran war, prices are going to shoot up due to shipping costs, and tariffs are still in effect. So, there is no telling when business will start to improve. We have some nice work coming in soon, but it's work we knew was coming. We are seeing some improvement in our estimating backlog, which is a good sign of better days to come. The war is causing a disruption of raw materials prices as we are producing plastic-based products, and virtually all of our raw materials are hydrocarbon-based.
Textile product mills
- April is slower than March in terms of sales. We are also waiting longer for inventory [due to] both longer production lead times and time spent at ports (for imported goods). Historically, we've seen a seasonal pickup in Q3/Q4 and are hoping 2026 has the same increase in sales and production. There does seem to be additional uncertainty and negative outlook given higher energy prices and war overseas not going away.
- Importing from China is precarious. The costs of product and freight are higher. Suppliers are apprehensive. Their costs are increasing, especially a certain raw material plastic impacted by petrochemicals affected by cost of oil.
