Texas Factory Activity Strengthens as Orders, Production and Outlook Improve
In August, Texas factory activity expanded at a faster pace after strengthening the prior month. The production index increased from 10.1 to 16.1, remaining above the series average of 9.6. The new orders and capacity utilization indices both climbed above their series averages, rising from 6.4 to 22.0 and from 5.9 to 12.8, respectively. Meanwhile, the shipments index moved up 5.3 points to 14.1, remaining above the series average of 7.8. The Eleventh District consists of all of Texas, Louisiana and southern New Mexico.
Perceptions of manufacturing business conditions strengthened in August as the general business activity index jumped 10.3 points to 11.6. At the same time, the company outlook index rose 5.8 points to 19.2. The uncertainty index stepped up 2.3 points to 8.7, remaining below the series average of 16.7.
Labor market indicators suggested weaker growth in head counts but a longer workweek in August, with the employment index decreasing 4.2 points to 8.0, and the hours worked index moving up 1.6 points to 5.9. Of those surveyed, 18.0% noted net hiring, while a smaller percentage (10.0%) noted net layoffs.
Price pressures were mixed, while wage pressures weakened in August. The index for prices paid for raw materials rose 2.8 points to 44.1, while the prices received index stepped down 2.9 points to 22.7, as both indices remained above series averages. The wages and benefits index fell 9.7 points to 21.1, in line with the series average of 21.1.
The outlook for future manufacturing activity strengthened in August, with the future production index moving up 6.3 points to 40.9, climbing above the series average of 36.0. Furthermore, the future company outlook index rose 6.6 points to 35.3, while the future general business activity index jumped 10.7 points to 37.2, remaining above the series average of 12.5.
