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Texas Fed Manufacturing Activity growth abated in November 2022
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Growth in Texas factory activity abated in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell five points to near zero, suggesting little change in output from October.
Other measures of manufacturing activity indicated contraction this month. The new orders index plummeted to -20.9―its sixth month in a row in negative territory and lowest reading since May 2020. The growth rate of orders index dropped seven points to -19.9. The capacity utilization index turned negative, falling from 9.1 to -3.4, and the shipments index posted a second consecutive negative reading at -7.5, down from -1.6 in October.
Perceptions of broader business conditions continued to worsen in November. The general business activity index posted a seventh consecutive negative reading but moved up five points to -14.4. The company outlook index pushed down further, from -9.1 to -15.2. The outlook uncertainty index retreated 18 points to 20.4, still slightly elevated relative to its average reading of 16.6.
Labor market measures pointed to slower employment growth and stable hours worked. The employment index slipped 11 points to 5.9, its lowest reading since mid-2020. Twenty-two percent of firms noted net hiring, while 16 percent noted net layoffs—a notable increase from the 9 percent share noting layoffs the prior two months. The hours worked index remained near zero, suggesting no change.
Price growth eased, while wage growth remained elevated. The raw materials prices index moved down nine points to 22.6, falling below its series average of 28.1 for the first time in more than two years. The finished goods prices index fell eight points to 13.9, still slightly above its series average of 9.0. The wages and benefits index was unchanged at 36.5.
Expectations regarding future manufacturing activity were mixed in November. The future production index remained positive, pushing up six points to 8.9. The future general business activity index remained negative, though it ticked up to -17.5. Most other measures of future manufacturing activity were positive and saw increases in index values this month.
Posted: November 28, 2022 Monday 10:30 AM