Texas-Area Manufacturing Slows in Feburary

Business activity among Texas-area manufacturers remains in expansion this month but barely so, according to a report released Monday by the Federal Reserve Bank of Dallas.

The bank said its general business activity index fell to 2.2 in February from 5.5 in January. Readings below 0 indicate contraction, and positive numbers indicate expanding activity.

The Dallas Fed survey is the third Fed regional survey, and so far the reports show mixed readings on February factory conditions. The report done by the New York Fed was unexpectedly positive, while the Philadelphia Fed survey was surprisingly weak.

Two more reports are scheduled this week. The Richmond Fed survey will released Thursday and the Kansas City Fed report is on tap for Thursday.

Within the Dallas Fed survey, the subindexes were generally positive but showed slower activity in February than in January.

The production index declined to 6.2 in February from 12.9 in January, and shipments fell back to 2.4 after the index almost doubled to 21.9 in January from 13.1 in December.

The new-orders index weakened sharply to 2.8 from 12.2 last month.

Labor-market conditions deteriorated. The employment index fell to 2.0 from 8.7, and the hours-worked index dropped to -3.0 from 0.8.

The prices-paid index fell to 15.8 from 27.8. The prices-received index declined to 4.6 after it jumped to 10.2 in January from -0.9 in December.

Manufacturers in Texas turned relatively optimistic in their outlook. The expected general business activity for the next six months stood at 10.8 this month, little changed from 9.2 in January.

Write to Kathleen Madigan at kathleen.madigan@dowjones.com

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