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Texas Fed Manufacturing Activity Increases Again, But at A Slower Pace in October
Texas factory activity increased again in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a fourth consecutive positive reading but moved down to 6.7. This suggests output grew but at a slower pace this month.
Other measures of current manufacturing activity showed mixed movements. The new orders and growth rate of orders indexes posted second consecutive negative readings in October, holding fairly steady at -3.5 and -5.1, respectively. The capacity utilization and shipments indexes have been positive throughout the second half of the year so far but fell notably after spiking last month, coming in at 0.8 and 1.9. The capital expenditures index moved up to 8.7, reaching its highest reading in nearly two years.
Perceptions of broader business conditions remained mixed. The general business activity index has been negative for nearly two years, although it continued to push closer to positive territory in October, coming in at -1.5. The company outlook index posted a second positive reading in a row, but moved down 5 points to 1.8.
Labor market measures indicated flat employment levels and slightly shorter workweek length. The employment index came in at 0.2, suggesting little change in headcounts in October. The hours worked index edged down to -1.8.
Price and wages generally rose this month. Input costs continued to rise, with the raw materials prices index holding fairly steady at 13.7. Selling prices have been falling since December 2014 but stabilized in September and edged up in October, with the finished goods prices index coming in at 1.2. Wages and benefits continued to rise but at a slightly slower pace, with the index moving down from 21.0 to 16.4.
Expectations regarding future business conditions improved again in October. The index of future general business activity posted a fifth positive reading in a row, although it fell from 9.3 to 4.8, indicating slightly less optimism. The index of future company outlook also fell but remained positive, coming in at 12.2. Other indexes for future manufacturing activity pushed higher into positive territory.
Posted: October 31, 2016 Monday 10:30 AM