Input Stories

In April, Texas factory activity rose, but at a slightly slower pace than the prior month. The production index slipped 0.9 points to 5.1, still indicating modest positive output growth. On the other hand, the new orders index plummeted nearly 20 points to -20.0, after March’s reading of -0.1. The capacity utilization index dropped to -3.8 from -2.3, while the shipments index turned negative for the first time this year, dropping from 6.1 to -5.5.

Perceptions of manufacturing business conditions worsened in April, with the general business activity index plunging more than 19 points to -35.8, the lowest reading since May 2020. The company outlook index fell more than 17 points to its post-pandemic low of -28.3. Meanwhile, the outlook uncertainty index, which has been volatile in previous months, increased again in April, rising nearly 11 points to 47.1. The series average is 17.3.

Labor market indicators suggested a decrease in head counts and shorter workweeks in April, with the employment index inching up to -3.9, while the hours worked index decreased to -6.4. Just more than 9% of firms reported net hiring, and a larger percentage (13.0%) noted net layoffs.

Upward pressure on prices intensified in April, while wage growth remained relatively stable. The prices paid for raw materials index jumped from 37.7 to 48.4, the highest reading since mid-2022. Meanwhile, the prices paid for finished goods index increased from 6.3 to 14.9. The wages and benefits index edged down from 16.0 to 14.3, below the series average of 21.1.

The outlook for future manufacturing activity is still positive, but less optimistic than March’s reading, with the future production index decreasing from 27.6 to 14.8. On the other hand, the future general business activity index fell nearly 9 points to -15.2, and the future company outlook index turned negative, falling 10.2 points to -6.0.