Research >> Economics
Texas Fed Manufacturing Activity Expansion Moderates in November
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Texas factory activity expanded in November for the sixth consecutive month, though at a markedly slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell from 25.5 to 7.2, indicating a deceleration in output growth.
Other measures of manufacturing activity also point to slower growth this month, as the indexes remained positive but came in below last month’s readings. The new orders index dropped 13 points to 7.2, and the growth rate of orders index fell five points to 9.7. The capacity utilization index dropped from 23.0 to 6.9, and the shipments index fell from 21.9 to 13.7.
Perceptions of broader business conditions continued to improve in November, though the indexes retreated from their October levels. The general business activity index remained positive but fell from 19.8 to 12.0. Similarly, the company outlook index fell from 17.8 to 11.0. Uncertainty regarding companies’ outlooks continued to rise, though the index declined from 11.0 to 7.2.
Labor market measures indicated stronger growth in employment and work hours. The employment index ticked up three points to 11.7, suggesting a slight pickup in hiring. Twenty-five percent of firms noted net hiring, while 13 percent noted net layoffs. The hours worked index moved up from 3.7 to 9.7.
Prices and wages continued to increase in November. The raw materials prices index climbed nearly six points to 35.0, a reading well above the series average. The finished goods prices and wages and benefits indexes edged down to 4.7 and 13.6, respectively. Both readings are slightly below their respective average readings.
Expectations regarding future activity remained positive in November, though several key indexes moved down from their October readings. The future production index fell six points to 40.8, and the future general business activity index edged down three points to 25.8. Other measures of future manufacturing activity showed mixed movements but remained solidly in positive territory.
Posted: November 30, 2020 Monday 10:30 AM