Research >> Economics
Texas Fed Manufacturing Activity Increased at a faster pace in May
Texas factory activity increased at a faster pace in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, moved up eight points to 23.3, reaching its highest level since April 2014.
Other measures of current manufacturing activity also rose to levels not seen since mid-2014. The new orders index pushed up to 18.1, and the growth rate of orders index rose to 12.3, marking its fifth consecutive positive reading. The capacity utilization index moved up to 19.4, with roughly a third of firms noting increased utilization. The shipments index surged 15 points to 24.7, reaching a level not seen in nearly 10 years.
Perceptions of broader business conditions improved again in May. The general business activity index held fairly steady at 17.2, and the company outlook index rose five points to 20.2.
Labor market measures indicated continued employment gains and markedly longer workweeks this month. The employment index came in at 8.3, posting a fifth positive reading in a row. Eighteen percent of firms noted net hiring, compared with 10 percent noting net layoffs. The hours worked index shot up 10 points to 15.7, its highest reading in six years.
Prices continued to rise in May, albeit at a somewhat slower pace, while wage pressures increased. Upward pressure on input costs receded slightly again, with the raw materials prices index falling three points to 17.5. Upward pressure on selling prices also abated, with the finished goods prices index falling from 12.0 to 5.9. The wages and benefits index, however, rose to 24.3, indicating a stronger rise in compensation costs than was seen in April.
Expectations regarding future business conditions continued to improve. The indexes of future general business activity and future company outlook came in at 31.6 and 30.9, respectively, up several points from last month’s readings. Other indexes for future manufacturing activity pushed further into positive territory.
Posted: May 30, 2017 Tuesday 10:30 AM