Research >> Economics
Texas Fed Manufacturing Activity continued to increase in August 2021
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Texas factory activity continued to increase in August, albeit at a slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, slipped 10 points to 20.8. The reading was well above average and indicative of robust output growth. Other measures of manufacturing activity also pointed to slower but above-average growth this month.
The new orders index came in at 15.6, down from 26.8 but more than double the series average of 6.5. The growth rate of orders index fell 15 points to 10.7. The capacity utilization and shipments indexes came in at 21.7 and 15.2, respectively, down from July levels but still elevated.
Perceptions of broader business conditions continued to improve in August, though the indexes came in markedly lower than in recent months. The general business activity index fell 18 points to 9.0, its lowest reading since January. The company outlook index fell 11 points to 11.5. The outlook uncertainty index pushed up from 14.6 to 21.1, posting its highest reading since May 2020.
Labor market measures indicate continued growth. The employment index remained highly elevated at 21.9, down a couple points from the July reading. Twenty-nine percent of firms noted net hiring, while 7 percent noted net layoffs. The hours worked index held steady at 24.3.
Prices and wages continued to increase strongly in August. The price indexes were largely unchanged at high levels, with the raw materials prices index at 74.9 and the finished goods prices index at 38.1. The wages and benefits index ticked down to 43.4 from 46.0 in July.
Expectations regarding future manufacturing activity remained optimistic in August, though the future general business activity index was less positive, falling from 37.1 to 15.1. The survey’s more tangible measures of future factory activity held up better but also slipped slightly. The future production index ticked down four points to 44.3, and most other measures of future manufacturing activity also declined slightly but remained solidly in positive territory.
Posted: August 30, 2021 Monday 10:30 AM