Research >> Economics
Texas Fed Manufacturing Activity declined in July 2023
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Texas factory activity declined in July, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held fairly steady at -4.8, a reading indicative of a modest contraction in output.
Other measures of manufacturing activity also indicated contraction in July. The new orders index has been in negative territory for more than a year and edged down to -18.1. The capacity utilization and shipments indexes remained negative but moved up to -2.4 and -2.2, respectively. The capital expenditures index continued to bounce around in the same low or slightly negative range since February; the July reading was -2.4.
Perceptions of broader business conditions continued to worsen in July. The general business activity index stayed negative but ticked up to -20.0, while the company outlook index pushed further negative to -16.9. The outlook uncertainty index moved up four points to 20.5.
Labor market measures suggest faster growth in employment and longer workweeks in July. The employment index rose eight points to 10.0, pushing back above its average reading of 7.9 after dipping below last month. Twenty-three percent of firms noted net hiring, while 13 percent noted net layoffs. The hours worked index returned to positive territory after three months, coming in at 3.9.
Price pressures increased in July but remained subdued, and wage growth moderated. The raw materials prices index rose nine points to 10.5, still well below its average reading of 27.6. The finished goods prices index moved up to 2.3, suggesting modest price growth this month. The wages and benefits index fell six points to 19.1, with the near-average reading indicative of a moderate increase in compensation costs.
Expectations regarding future manufacturing activity improved in July. The future production index remained positive but slipped to 15.5. The future general business activity index rose from -4.5 to 4.6, entering positive territory for the first time in more than a year. Other measures of future manufacturing activity showed mixed movements this month but remained solidly in positive territory.
Posted: July 31, 2023 Monday 10:30 AM