News & Insights

In September, Texas factory activity continued to expand but at a slower pace than the prior month. The production index declined from 15.3 to 5.2, falling below the average of 9.6. Other measures also moved down in September, pointing to slower growth. The new orders index fell 8.4 points into negative territory in September, decreasing to -2.6. Capacity utilization slipped 9.8 points to 3.9, while shipments dropped 7.5 points to 6.7.

Perceptions of manufacturing business conditions worsened in September, with the general business conditions index falling 6.9 points to -8.7, while the outlook also declined, with the company outlook index decreasing 4.3 points to -1. Meanwhile the uncertainty index dropped 4.4 points to 13.9, below the series average of 17.2.

Labor market indicators suggest a decline in headcounts and a slightly longer workweek in September, with the employment index dropping 12.2 points to -3.4, while the hours worked index fell 11.6 points but remained positive at 3.4. Nearly 13% of firms reported net hiring while a larger percentage (16.1%) noted net layoffs.

Price and wage pressures were largely unchanged in September. The prices paid for raw materials index edged down 0.3 points to 43.4. Meanwhile, the prices received for finished goods index declined 3.4 points to 11.7. The wages and benefits index inched up 0.5 points to 15.9 but stayed below the series average of 21.

The outlook for future manufacturing activity weakened from August, with the future production index falling 8.8 points to 31.6. Meanwhile, the future general business activity index and future company outlook index both declined, dropping to 8.4 and 11.7, respectively.