Research >> Economics
Texas Fed Manufacturing Activity continued in October 2023
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Growth in Texas factory activity continued in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, posted a second positive reading after four months in negative territory. It edged down to 5.2, a reading that signals a modest pace of output expansion.
Other measures of manufacturing activity showed mixed signals this month. The new orders index remained negative and slipped four points to -8.8. The capacity utilization index posted a second consecutive positive reading, coming in at 5.4, while the shipments index remained near zero.
Perceptions of broader business conditions continued to worsen in October. The general business activity and company outlook indexes remained largely unchanged at -19.2 and -17.1, respectively, having now spent a year and a half in negative territory. The outlook uncertainty index remained elevated but retreated from 27.0 to 20.2.
Labor market measures suggest slower employment growth and shorter workweeks in October. The employment index declined seven points to 6.7, a reading just below the series average of 7.9. Nineteen percent of firms noted net hiring, while 13 percent noted net layoffs. The hours worked index slipped back into negative territory, coming in at -2.3.
Upward pressure on input costs—both labor and materials—retreated this month, and selling prices fell modestly. The raw materials prices index dropped 11 points to 13.6, a reading well below average. The finished goods prices index fell to -2.1, its lowest reading in more than three years. The wages and benefits index dropped 10 points to 24.4, a reading much closer to average than what has typically been seen the past three years.
Expectations regarding future manufacturing activity were mixed in October. The future production index remained positive and pushed up nine points to 20.0. The future general business activity index rose 10 points but remained negative at -6.8. Most other measures of future manufacturing activity advanced into more-positive territory this month.
Posted: October 30, 2023 Monday 10:30 AM