News & Insights

In February, Texas factory activity improved after expanding the prior month. The production index increased from 11.2 to 12.5, remaining above the series average of 9.6. The new orders index ticked down 0.7 points to 11.1, while the capacity utilization index stepped up 4.7 points to 11.8. Meanwhile, the shipments index decreased 2.1 points to 9.9. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Perceptions of manufacturing business conditions strengthened in February, with the general business activity index rising 1.4 points to 0.2. At the same time, the company outlook index inched up 0.2 points to 3.1. On the other hand, the uncertainty index increased 1.7 points to 6.5 but remained below the series average of 16.8.

Labor market indicators suggested weaker growth in headcounts and a longer workweek in February, with the employment index edging down 0.7 points to 7.5 and the hours worked index rising 5.4 points to 6.1. Nearly 18.0% of firms reported net hiring, while a smaller percentage (10.5%) noted net layoffs.

Price pressures weakened slightly, while wage pressures accelerated in February. The prices paid for raw materials index declined 5.4 points to 31.7. Meanwhile, the prices received for finished goods index ticked down 0.6 points to 17.9 but remained far higher than the series average. The wages and benefits index jumped 14.5 points to 31.9, rising above the series average of 21.0.

The outlook for future manufacturing activity weakened in February, despite the future production index improving 5.1 points to 34.3. Moreover, the future company outlook index moved up 2.5 points to 25.7, while the future general business activity declined 3.9 points to 12.7, remaining above the series average.