Research >> Economics
Texas Fed Manufacturing Activity Contracted Slightly in November
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Texas factory activity contracted slightly in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, dipped into negative territory for the first time since mid-2016, falling seven points to -2.4.
Other measures of manufacturing activity were also negative in November, suggesting declines. The new orders index remained negative for a second month in a row, coming in at -3.0. The growth rate of orders index pushed further into negative territory, falling from -5.9 to -9.3. The capacity utilization and shipments indexes turned negative after three years in positive territory, falling to -5.3 and -4.5, respectively.
Perceptions of broader business conditions worsened slightly in November. The general business activity index remained negative but moved up from -5.1 to -1.3. The company outlook index fell 11 points to -2.1. Both indexes have oscillated between positive (expansionary) and negative (contractionary) territory this year, with the latest barely-negative readings suggesting modest contraction. The index measuring uncertainty regarding companies’ outlooks moved up to 17.1, a reading well above average.
Labor market measures suggested stable employment levels and shorter workweeks this month. The employment index retreated from 11.0 to 0.9, with the near-zero reading suggesting little to no job growth on balance. Eighteen percent of firms noted net hiring, while 17 percent noted net layoffs. The hours worked index dipped from 4.7 to -4.3.
Prices and wages continued to rise in November, although growth in selling prices was quite muted. Upward pressure on raw materials eased somewhat, with the index declining five points to 17.8. The finished goods prices index retreated to 1.9, with the vast majority of manufacturers noting no change in selling prices from October. The wages and benefits index held steady at 21.1.
Expectations regarding future business conditions remained optimistic in November. The index of future general business activity rose five points to 7.3, while the index of future company outlook edged up to 17.0. Other indexes for future manufacturing showed mixed movements but remained solidly in positive territory.
Posted: November 25, 2019 Monday 10:30 AM