News

In July, Texas factory activity rose markedly following a decline in June. The production index jumped 20 points to 21.3, the highest reading in three years. Meanwhile, other measures were mixed. The new orders index remained negative at -3.6 but advanced nearly four points. On the other hand, capacity utilization and shipments jumped into positive territory, to 17.3 and 2.7, respectively.

Perceptions of manufacturing business conditions improved in July, with the general business conditions index climbing nearly 14 points to 0.9 and the company outlook index leaping nearly 14 points to 4.7, the first positive reading in six months. Meanwhile, the uncertainty index, alternatively, declined four points to 11.2. The series average is 17.2.

Labor market indicators suggested an increase in headcounts and longer workweeks in July, with the employment index rising 2.7 points to 8.4, while the hours worked index climbed back into positive territory to 7.7 from -8.4. More than 17% of firms reported net hiring, while a smaller percentage (9.0%) noted net layoffs.

Historically high upward pressure on prices eased in July, while wage growth remained relatively stable. The prices paid for raw materials index decreased slightly, from 43.0 to 41.7. Meanwhile, the prices received for finished goods index dropped 15 points to 11.1. The wages and benefits index remained largely unchanged at 13.2 and stayed below the series average of 21.1.

The outlook for future manufacturing activity strengthened from June, with the future production index rising from 22.6 to 30.3. Furthermore, the future general business activity index and the future company outlook index both improved, rising to 19.0 and 21.6, respectively.