Research >> Economics
Texas Manufacturing Activity Expands at a Slower Pace
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Texas factory activity continued to expand in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key indicator of state manufacturing conditions, edged downward from its January reading but remained positive, suggesting slower growth in output.
Several indicators of current factory activity turned negative in February, reversing recent months’ improvements. The new orders index fell from 27 to –6, with the share of respondents reporting decreases more than tripling from January. With new orders falling, indexes for shipments and growth rate of orders also retreated, turning slightly negative. Capacity utilization was unchanged from January as the index came in at zero.
The business activity and company outlook indexes slid below zero due to an increase in the share of manufacturers reporting deteriorating conditions.
The index for employment remained negative but was little changed from January as most respondents held employment levels steady. The wages and benefits index was positive for the third consecutive month.
Upward pressure on raw materials prices continued in February, with 41 percent of producers reporting rising input costs. The finished goods price index remained close to zero, suggesting minimal pressures on selling prices. Expectations of upward price pressures over the next six months moderated in February as both the future raw materials price and the future finished goods price indexes edged downward.
Several future activity indexes weakened in February, but they remained positive, indicating firms are still optimistic about the six-month outlook. Forty-seven percent of executives continued to expect increases in production, capacity utilization and growth rate of orders six months from now, while one-third reported an improved six-month company outlook. The future business activity index was essentially unchanged in February.
Posted: February 22, 2010 Monday 10:30 AM