Fed Dallas Bank Survey: ‘Collapsed Silicon Valley Bank could be the beginning of more challenges ahead’

The Federal Reserve Bank of Dallas’ General Business Activity Index for Manufacturing in Texas remained in contraction territory for the 12th straight month in March.

The regional central bank’s index clocked in at -15.7 this month, down from 13.5 in February, with the results suggesting broader business conditions are poised to deteriorate.

Here is a breakdown of the index:

• New orders: -14.3
• Orders: -15.2
• Shipments: -10.5
• Production: +2.5
• Capacity utilization: +2.3
• Labor: +10.4
• Outlook: -13.3

Here are some of the survey comments (emphasis ours);

• We continue to struggle to find qualified manufacturing employees. We are investing heavily in automation to increase productivity and allow us to meet demand without adding head count. This also allows us to pay more to the people we have, which should help us retain skilled people.
• [The collapse of] Silicon Valley Bank could be the beginning of more challenges ahead.
• Our outlook is horrible. The level of certainty is zero. Production is hand to mouth. We cannot find workers.
• We are laying off workers for the first time since 2010.
• Business is slowing down. Mexican imports are increasing. We can no longer sell all of our capacity. Requests for quotations for curtain walls for office buildings are drying up for 2024. We actually expect that part of our business will slow down in the third and fourth quarters.
• There are too many negatives in the economy: International conflict, inflation, poor national leadership, deficit spending, the Federal Reserve keeping rates artificially low and now raising them quickly and steeply, thus stressing the financial markets.