Texas factory activity increased in October but several measures pointed to a slower pace for growth, the Dallas Federal Reserve reported today.
The production index fell from 17.6 to 13.7, according to the Texas Manufacturing Outlook Survey, the bank’s monthly survey of manufacturing executives. The capacity utilization index edged down to 18.1 and the shipments index also slipped, to 12.8. Still, more than a quarter of the firms reported increases in these latter two measures.
Looking ahead, however, the new orders index spiked upward, from 7.5 to 14.2, a six-month high. Perhaps as a result, Texas manufacturers were more optimistic about their company outlooks, with that index improving more than 12 points to 18.2, again a six-month high.
Labor market indicators in October reflected continued employment growth and longer workweeks, the bank noted. The employment index held steady at 10.2. Nineteen percent of firms reported net hiring, compared with 9% reporting layoffs. The hours worked index dipped slightly to 8.3 from 9.5 in September. The wages and benefits index fell to 24.5 from 26.2 last month. The index for future employment increased 13 points to 31.7, indicating more hiring in the next six months.
The Dallas Fed said upward pressure on prices and wages continued at about the same pace in October. The raw materials prices index was 19.7, mostly unchanged from last month. The finished goods prices index also held steady, at a reading of 7.1, with more than 80% of manufacturers noting no change in selling prices this month.
Asked about future general business activity, Texas manufacturers were slightly more optimistic, with that index rising to 13.3. Indexes for future manufacturing activity showed mixed movements in October, the bank noted, but remained on a solid growth track.