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Texas Manufacturing Activity Increased Markedly in September
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Texas factory activity increased markedly in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose 12 points to 16.7, suggesting output picked up at a notably faster pace this month.
Some other measures of current manufacturing activity also reflected faster expansion, while the survey's demand indicators dipped back into negative territory. The capacity utilization and shipments indexes posted double-digit gain to reach 13.5 and 20.1, respectively. These reading represent the highest readings for these indexes in roughly two years. The new orders index fell from 5.3 to -2.9 in September, and the growth rate of orders index fell to -5.8 after pushing into positive territory last month.
Perceptions of broader business conditions were mixed. The general business activity index remained negative for a 21st consecutive month, although it edged up to -3.7. The company outlook index reflected optimism as it pushed into positive territory for the first time since November 2015, coming in at 6.7.
Labor market measures indicated slight employment gains and longer workweek length. The employment index came in at 2.3, its first positive reading in nine months. Nineteen percent of firms noted net hiring while 16 percent noted net layoffs. The hours worked index also moved up to positive territory, coming in at 3.7 in September.
Price pressures were mixed, and wages continued to rise. Upward pressure on input costs continued this month, with the raw materials prices index holding fairly steady at 13.3. Selling prices were little changed in September, as indicated by a near-zero reading of the finished goods prices index. Meanwhile, wages and benefits continued to rise, with the index climbing to 21.0.
Expectations regarding future business conditions improved again in September. The index of future general business activity posted a fourth positive reading in a row, edging up to 9.3. The index of future company outlook also edged up, coming in at 17.8. Other indexes for future manufacturing activity fell but stayed in solid positive territory.
Posted: September 26, 2016 Monday 10:30 AM