12:26 PM EDT, 03/25/2024 (MT Newswires) -- Texas' manufacturing activity fell more than expected this month as production, orders and shipments swung back into negative territory, according to the Federal Reserve Bank of Dallas.

The general business activity index slipped to negative 14.4 in March from negative 11.3 in February, data from the Fed branch published Monday showed. Analysts surveyed in a Bloomberg poll were expecting a smaller decline to negative 11.5.

Production, which the Dallas Fed calls a key measure of state manufacturing conditions, dropped to negative 4.1 from February's positive reading of 1. Orders swung to negative 11.8 from 5.2, and shipments fell to negative 15.4 from 0.1 prior.

"Texas' manufacturing sector faltered this month, with output and demand indicators returning to negative territory after pushing positive in February," Emily Kerr, senior business economist at the Dallas Fed, said. "Employment growth continued, however, though the pace slowed."

The employment index fell 4.4 points but remained positive at 1.5. Hours worked decreased nearly a point month over month to negative 7.9, the report showed. The index charting prices paid for raw materials climbed to 21.1 this month from February's 15.4, while prices received surged to 11 from 0.8 sequentially.

Six months out, the gauge for general business activity dropped to 1.3 in March from 6.2 in February. The future orders component declined by half a point to 23.7 while shipments expectations fell to 21.5 from 24.4 month to month.

Production expectations rebounded about 10 points from February to 32.3 in March, the regional Fed said. The future employment index edged up to 17.9 from 15.6 while hours worked dropped roughly five points into shallow contraction territory at negative 0.5.

"Weakening demand and domestic policy uncertainty, particularly around the national elections, are top outlook concerns among manufacturers," Kerr said.