Texas manufacturing activity slowed in May as confidence in economy weakens

According to a survey by the Federal Reserve Bank of Dallas, the manufacturing sector in Texas slowed in May and weakened awareness of state business conditions this month.

According to executives in the survey, fears of the impact of tariffs seem to reveal uncertainty in the market. As more than a quarter of companies reported an increase in uncertainty this month, the response has raised the level of uncertainty to its highest level since September.

According to the survey, the indicators turned negative in May for both broad business activities and individual companies. The new order index, which indicates demand in the manufacturing sector, fell in May but remained positive overall.

Texas produces about 10{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of all US manufactured products.


Despite the uncertainty, Texas' manufacturing and services businesses still have a lot of open jobs and more than 70{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of the companies surveyed said they want to hire.

More than 80{7be40b84a6a43fc4fae13304fce9a2695859798abfc41afd127b9f8b21c5f9c5} of companies surveyed in public office reported having problems finding qualified workers.

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"This is naturally interpreted as wage pressure," said Emily Kerr, senior business economist at the Dallas Fed. "They are increasing their wages to hire and retain employees."

Wage increases may be on the horizon, but the wage and benefits index, which measures wage increases, did not change much from the previous month.


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