Texas manufacturers kept expanding in October, but at a noticeably slower pace than in September, according to the Federal Reserve Bank of Dallas.
The bank's monthly Texas Manufacturing Outlook Survey, released Monday, showed its production index, the main gauge of factory conditions in the state, falling 14 points to 15.8. That reading still sits above the index's long-run average of 9.7, so the bank described the pace as slower but still solid.
Orders and shipments eased
The sharpest drop came in new orders. That index fell to 9.3 from 30.7 in September. The shipments index slid 16 points to 8.4, and capacity utilization dropped about 10 points to 13.7.
Each index is built by subtracting the share of companies reporting a decrease from the share reporting an increase, so a positive number means more firms saw gains than losses. Data were collected Oct. 13 through 21, and 64 of the 114 manufacturers surveyed responded.
Hiring slowed, hours rose
Employment kept growing but more slowly, with that index easing to 11.6 from 15.1. The hours worked index rose about 5 points to 10.1, and capital spending ticked up to 11.9 from 8.5.
Costs stay elevated
Price pressure edged higher. The index for raw materials prices rose about 3 points to 55.3, far above its series average of 28.1, and the index for prices manufacturers charge for finished goods rose to 29.9 from 27.6. Wage and benefit pressure eased, with that index falling about 7 points to 20.8.
Brighter mood for the months ahead
Even with slower output, executives were more positive about business in general. The general business activity index rose to 13.4 from 9.8, and the company outlook index climbed about 7 points to 16.1. A measure of how uncertain firms feel about the outlook dipped to 7.9.
Looking six months out, the future production index held near 39.4, the future general business activity index jumped about 17 points to 38.1, and expected employment rose to 31.5 from 18.1.
The bank also asked Texas businesses about credit this month. Among 283 executives answering its manufacturing and service-sector surveys, 15% said they were having at least some difficulty getting short-term financing for things like payroll and supplies, unchanged from a year ago and below a peak of 20% in April 2023. A similar 16% reported trouble getting long-term financing for capital projects.
The next manufacturing survey is due Monday, Nov. 30.
Sources
dallasfed.org
