News

In August, Texas factory activity continued to expand but at a slower pace than the prior month. The production index fell from 21.3 to 15.3 but remained well above average. Meanwhile, other measures also indicated solid growth. The new orders index turned positive for the first time since January, advancing 9.4 points to 5.8. Capacity utilization slipped 3.6 points to 13.7 but remained elevated, while shipments jumped 11.5 points to 14.2.

Perceptions of manufacturing business conditions worsened slightly in August, with the general business conditions index declining nearly 3 points to -1.8, while the outlook improved but at slower pace, with the company outlook index dropping 1.4 points to 3.3. Meanwhile, the uncertainty index, alternatively, climbed more than 7 points to 18.3, above the series average of 17.2.

Labor market indicators suggested an increase in headcounts and longer workweeks in August, with the employment index inching up 0.4 points to 8.8, while the hours worked index surged to 15.0 from 7.7. Twenty percent of firms reported net hiring, while a smaller percentage (11.2%) noted net layoffs.

Historically high upward pressure on prices accelerated in August, while wage growth also quickened. The prices paid for raw materials index increased slightly, from 41.7 to 43.7. Meanwhile, the prices received for finished goods index rose 4.0 points to 15.1. The wages and benefits index edged up 2.2 points to 15.4 but stayed below the series average of 21.0.

The outlook for future manufacturing activity strengthened from July, with the future production index soaring from 30.3 to 40.4. Furthermore, the future general business activity index and the future company outlook index both improved, rising to 24.8 and 26.8, respectively.