Input Stories

In May, Texas factory activity held steady, following slight growth in April. The production index fell four points to 0.9, indicating relatively flat output growth. The new orders index remained negative but improved, rising to -8.7 from -20.0 in April. The capacity utilization index also rose but remained negative, up 2.3 points to -1.5, while the shipments index turned positive, increasing six points to 0.5.

Perceptions of manufacturing business conditions continued to worsen in May but at a slower rate of decline than the prior month, with the general business activity index rising more than 20 points to -15.3. The company outlook index also improved while remaining negative, increasing to -11.3 from -28.3. Meanwhile, the outlook uncertainty index, which has been volatile in recent months, retreated in May, falling more than 34 points to 12.7. The series average is 17.3.

Labor market indicators suggested a slight increase in head counts and shorter workweeks in May, with the employment index back in positive territory at 3.5, while the hours worked index remained negative at -3.6. More than 11% of firms reported net hiring, while a smaller percentage (8.0%) noted net layoffs.

Historically high upward pressure on prices persisted in May, while wage growth remained relatively stable. The prices paid for raw materials index softened slightly, falling from 48.4 to 40.7. Meanwhile, the prices paid for finished goods index was largely unchanged, rising just 0.2 points. Both price indexes are roughly double their series averages. Meanwhile, the wages and benefits index is below the series average of 21.1, increasing 0.7 points to 15.0 in May.

The outlook for future manufacturing activity improved from April, with the future production index increasing from 14.8 to 31.1. Meanwhile, the future general business activity index and the future company outlook index both turned positive, rising 16.5 points and 11.6 points to 1.3 and 5.6, respectively. Other indicators also rose but remained below average.