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Texas Fed Manufacturing Activity continued to increase at a slightly slower pace in October 2021
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Texas factory activity continued to increase in October, albeit at a slightly slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell six points to 18.3. The reading was still well above average and indicative of solid output growth.
Movements were mixed for other measures of manufacturing activity, though all indicated notable growth. While the shipments and capacity utilization indexes slipped slightly to 13.8 and 20.1, respectively, the survey’s demand indexes rose. The new orders index came in at 14.9, up five points from September and well above the series average of 6.6. The growth rate of orders index pushed up 11 points to 13.6. Supply-chain disruptions continued to plague many manufacturers, and the unfilled orders index and delivery time indexes pushed up to 20.9 and 25.9, respectively.
Perceptions of broader business conditions were more positive in October. The general business activity index jumped 10 points to 14.6, and the company outlook index rebounded to 2.4 after slipping into slightly negative territory last month. Uncertainty continued to rise, however, with the outlook uncertainty index reaching 29.0, its highest reading since April 2020 amid the onset of the pandemic.
Labor market measures indicated robust employment growth and longer workweeks. The employment index edged up further to 28.3, a six-month high. Thirty-two percent of firms noted net hiring, while 4 percent noted net layoffs. The hours worked index remained elevated and was largely steady at 18.5.
Prices and wages continued to increase strongly in October. The raw materials prices remained near an all-time high but edged down to 76.3, while the finished goods prices index rose to a new high of 49.8. The wages and benefits index held near its own series high at 44.1.
Expectations regarding future manufacturing activity were generally more positive in October. The future production index moved up five points to 46.8, and the future general business activity index inched up to 15.0. Most other measures of future manufacturing activity pushed further into positive territory.
Posted: October 25, 2021 Monday 10:30 AM