Research >> Economics
Texas Fed Manufacturing Activity Picks Up Steam in September
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For this month’s survey, Texas business executives were asked supplemental questions on the impacts of COVID-19. Results for these questions from the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey have been released together. Read the special questions results.
Texas factory activity expanded in September for the fourth month in a row following a record contraction due to the COVID-19 pandemic, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose nine points to 22.3, its highest reading in two years.
Other measures of manufacturing activity point to above-average growth this month. The new orders index advanced five points to 14.7, and the growth rate of orders index held fairly steady at 13.2. The capacity utilization index rose from 10.9 to 17.5, while the shipments index was largely unchanged at 21.5.
Perceptions of broader business conditions continued to improve in September. The general business activity index pushed up six points to 13.6, its highest reading since November 2018. The company outlook index held mostly steady at 14.9, a reading well above average. Uncertainty regarding companies’ outlooks continued to rise, with the index positive but largely unchanged at 6.7.
Labor market measures indicated stronger employment growth and a continued increase in workweek length. The employment index pushed up from 10.6 to 14.5, suggesting more robust hiring. Twenty-four percent of firms noted net hiring, while 10 percent noted net layoffs. The hours worked index remained positive but moved down from 10.5 to 6.9.
Prices and wages increased further in September. The raw materials prices index rose seven points to 26.2, surpassing the series average. The finished goods prices index pushed up to 5.2, its highest reading in 17 months. Compensation costs continued to rise, with the wages and benefits index coming in at 15.9.
Expectations regarding future activity were generally more positive in September. The future production index pushed up further to a reading of 47.8, and the future general business activity index jumped eight points to 28.0. Most other measures of future manufacturing activity advanced further into positive territory.
Posted: September 28, 2020 Monday 10:30 AM