Research >> Economics
Texas Manufacturing Activity Strengthens Further
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Texas factory activity increased in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was positive for the third consecutive month and came in at a reading of 13, up from 7 in October.
All other manufacturing activity indicators also rose, posting their best month since May. The new orders and shipments indexes turned positive after five months of negative readings. The capacity utilization index rose from –2 to 10, with 27 percent of respondents reporting an increase.
Measures of general business conditions improved in November, suggesting the broader economy continued to strengthen. The general business activity index jumped from 3 in October to 16 this month, with 23 percent of manufacturers reporting improved activity. The company outlook index also rose, increasing from 13 to 19, as more than one-quarter of respondents said their outlook improved in November.
Labor market indicators picked up this month. The employment index rose from –4 to 6, reaching its highest level since May, and hours worked increased for the first time in four months. The wages and benefits index remained positive, although 89 percent of companies noted no change in compensation costs.
Prices firmed in November. Input costs continued to climb, with the raw materials price index rising from 30 to 35. Thirty-seven percent of manufacturers saw an increase in prices paid for raw materials, compared with only 2 percent who saw a decrease. Finished goods prices rose slightly as the index pushed into positive territory after posting negative readings in four of the last five months. Over the next six months, 49 percent of respondents anticipate further increases in raw materials prices, while one-third expect higher finished goods prices.
Manufacturers’ six-month outlook continued to improve. The future indexes for production, new orders, shipments and capacity utilization rose to their highest levels since January. The future general business activity index advanced from 14 to 26, and the future company outlook index rose to 31, with 94 percent of firms anticipating similar or improved conditions six months from now.
Posted: November 29, 2010 Monday 10:30 AM