Research >> Economics
Texas Manufacturing Activity Picks Up and Outlook Improves
Texas factory activity rose slightly in September, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged back into positive territory following a reading near zero in August.
Other factory activity indicators also improved in September. The new orders and shipments indexes remained negative for the fourth month in a row but moved up from their August levels. The growth rate of orders index jumped from –13 to zero, suggesting the pace of incoming orders may be stabilizing. Meanwhile, the September capacity utilization index climbed back into positive territory, with the share of manufacturers reporting an increase rising from 22 to 28 percent.
Labor market indicators improved slightly in September. The employment index turned positive, up from a negative reading in August. Nineteen percent of respondents said they hired additional employees, while 17 percent noted layoffs. Hours worked were largely unchanged, while wages and benefits rose modestly.
Prices firmed this month. After doubling in August, the raw materials price index remained at 24 in September, with 31 percent of manufacturers reporting higher input prices. Finished goods prices stabilized, ending a three-month streak of declines. The future indexes for both raw materials prices and finished goods prices were positive and posted large increases over last month.
The six-month outlook improved in September. Most future indexes of manufacturing conditions rose this month after falling in August. The future indexes for production and new orders jumped up; nearly half of manufacturers expect increases in these indicators in coming months. The future general business activity index advanced from –4 to 5, and the future company outlook index rose as well, with 80 percent of firms anticipating flat or improved activity six months from now.
Posted: September 27, 2010 Monday 10:30 AM