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Texas Fed Manufacturing Activity Accelerates in February
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Texas factory activity expanded at a faster pace in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose 11 points to 27.9, signaling a pickup in output growth.
Demand growth continued at roughly the same pace as in January, while some other measures of manufacturing activity pointed to slightly stronger growth this month. The new orders and growth rate of orders indexes held steady at 25.3 and 15.3, respectively. The capacity utilization index rose five points, coming in at 19.6. The shipments index also rose five points and reached 32.1, its highest reading since 2006.
Perceptions of broader business conditions improved further in February. The general business activity index pushed up to 37.2, its highest reading in 12 years. The company outlook index climbed four points to 31.5, on par with its December 2017 reading, which was also the highest in 12 years.
Labor market measures suggested a pickup in hiring and longer workweeks this month. The employment index came in at 19.1, up four points from January. Thirty percent of firms noted net hiring, compared with 11 percent noting net layoffs. The hours worked index moved up to 16.3.
Price pressures remained elevated in February, and wages rose at a faster clip. The raw materials prices index climbed six points to 39.8, its highest reading since 2011. The finished goods prices index edged up to 22.5, also a level last seen in 2011. The wages and benefits index posted a 9-point increase to 32.2, an 11-year high. Nearly a third of firms noted an increase in compensation from January levels, while roughly two-thirds noted no change.
Expectations regarding future business conditions remained optimistic in February. The indexes of future general business activity and future company outlook slipped to 40.6 and 34.5, respectively, but both stayed well above their average readings. Most other indexes for future manufacturing activity also fell but remained highly positive.
Posted: February 26, 2018 Monday 10:30 AM