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Texas Fed Manufacturing Activity Strengthens Further Even as Costs Continue to Climb in November 2021
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Texas factory activity increased at a faster pace in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose nine points to 27.4, a reading well above average and indicative of robust output growth.
Other measures of manufacturing activity also indicated a further pickup in growth. The new orders index came in at 19.6, up five points from October and far above the series average of 6.6. The growth rate of orders index pushed up three points to 16.8. The shipments index shot up 11 points to 24.3, its highest reading since July, and the capacity utilization index moved up from 20.1 to 26.4.
Perceptions of broader business conditions were mixed in November. The general business activity index remained positive, indicating an improvement in activity from October, though it eased three points to 11.8. The company outlook index came in at 1.3, with the near-zero reading indicating little change in outlooks from October. Uncertainty continued to rise, with the outlook uncertainty index holding fairly steady at a highly elevated reading of 27.7.
Labor market measures indicated robust employment growth and longer workweeks. The employment index inched up to 28.5, a seven-month high. Thirty-three percent of firms noted net hiring, while 5 percent noted net layoffs. The hours worked index also remained elevated and was largely steady at 19.6.
Prices and wages continued to increase strongly in November. Amid widespread supply-chain disruptions, the raw materials prices index pushed up six points to 82.1, hitting a new series high. The finished goods prices index eased off its high last month, falling eight points to 42.2 but still far exceeding its historical average of 7.6. The wages and benefits index came in near its own series high, edging up from 44.1 to 47.6.
Expectations regarding future manufacturing activity were generally more positive in November. The future production index moved up five points to 51.7, and the future general business activity index jumped 14 points to 28.6. Other measures of future manufacturing activity showed mixed movements but remained solidly in positive territory.
Posted: November 29, 2021 Monday 10:50 AM