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Texas Fed Manufacturing Activity growth continued in October 2022
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Growth in Texas factory activity continued in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged down three points to 6.0, suggesting a slight deceleration in output growth.
Other measures of manufacturing activity also moved down this month. The new orders index slipped to -8.8―its fifth month in a row in negative territory—suggesting a continued decrease in demand. The growth rate of orders index also remained negative and dropped 12 points to -13.2. The capacity utilization index was positive but moved down from 13.4 to 9.1, and the shipments index dipped into negative territory for the first time since May 2020, coming in at -1.6.
Perceptions of broader business conditions worsened in October. The general business activity index posted a sixth consecutive negative reading and edged down from -17.2 to -19.4. The company outlook index also remained negative and was largely unchanged at -9.1. The outlook uncertainty index pushed higher to 38.3.
Labor market measures continued to indicate robust employment growth, though workweeks are no longer lengthening. The employment index ticked up to 17.1, a reading significantly above its series average of 7.8. Twenty-six percent of firms noted net hiring, while 9 percent noted net layoffs. The hours worked index fell to a near-zero reading this month—indicating no change in workweek length—ending a two-year trend of increases.
Prices and wages continued to increase at an elevated pace. The raw materials prices index moved down five points to 32.0, converging toward its series average of 28.1. The finished goods prices index, however, rose four points to 22.2, pushing further above its series average of 9.0. The wages and benefits index remained elevated at 36.7, unchanged from September.
Expectations regarding future manufacturing activity were mixed in October. The future production index remained positive, though it plummeted 25 points to 3.1, its lowest reading since April 2020. The future general business activity index remained negative and largely unchanged at -21.2. Other measures of future manufacturing activity saw large declines in index values this month, though most remained in positive territory, with the exception of the future new orders index, which fell to -4.5.
Posted: October 31, 2022 Monday 10:30 AM