News & Insights

In May, Texas factory activity expanded at a slower pace after strengthening the prior month. The production index decreased from 19.0 to 9.4, falling slightly below the series average of 9.6. The new orders index stepped down 3.5 points to 6.4, while the capacity utilization index fell 14.6 points to 5.2, below the series average of 7.5. Meanwhile, the shipments index declined 7.6 points to 7.4, slightly below the series average of 7.8. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Perceptions of manufacturing business conditions improved slightly in May, with the general business activity index moving up 2.7 points to 0.4. At the same time, the company outlook index remained positive but slipped 2.7 points to 0.3. Moreover, the uncertainty index rose 1.3 points to 19.2, remaining above the series average of 16.9.

Labor market indicators suggested a slight uptick in headcounts and a longer workweek in May, with the employment index moving up 1.1 points to 0.2 and the hours worked index decreasing 2.2 points to 1.8. Of those surveyed, 17.7% reported net hiring, while nearly the same percentage (17.5%) noted net layoffs.

Price pressures were mixed, while wage pressures weakened in May. The prices paid for raw materials index rose 5.7 points to 42.7. Meanwhile, the prices received for finished goods index fell 8.7 points to 18.9, both higher than the series averages. The wages and benefits index ticked down 1.2 points to 23.6, also remaining above the series average of 21.0.

The outlook for future manufacturing activity strengthened in May, with the future production index rising 2.2 points to 36.8 and climbing above the series average of 36.0. Furthermore, the future company outlook index moved up 0.9 points to 16.5, while the future general business activity index inched up 0.2 points to 14.3, remaining above the series average of 12.3.