Texas Manufacturing Activity Gains in September

September’s production index gained handily to 17.6 from 6.8 in August, indicating output grew at a faster pace than in August. Also rising was the new orders index, up five points to 7.5 in September. The capacity utilization index rose up to 20.2 in September after dipping to 3.6 in August — and about one-third of manufacturers noted an increase. The shipments index also rose to 15.9 in September, after falling to 6.4 in August.

The general business activity index was also more optimistic after moving up to 10.8 in September, nearly four points above its non-recession average of 7.0. The company outlook index rose to 5.8 in September from 1.5 in August, with a larger share of firms noting an improved outlook.

Other data were as follows:

• The September employment index posted a fourth robust reading, holding fairly steady at 10.6, with 24% of firms reported net hiring compared with 14% reporting net layoffs.
• The hours worked index rose to a five-month high of 9.5, indicating a stronger rise in hours worked than in recent months.
• Upward pressure on prices eased slightly in September, while wage pressure increased.
• The raw materials price index fell seven points to a reading of 19.5.
• The finished goods price index also fell but to a lesser degree, edging down from 9.1 to 7.0.
• The wages and benefits index rose for the second month in a row and came in at 26.2, its highest reading since before the Texas recession began in mid-2008.
• The index of future general business activity fell from 18.7 to 12.1.
• The index of future company outlook rose from 30.1 to 32.3.

It should be noted that the Dallas Fed collected data for this Texas Manufacturing Outlook survey from September 16 to 24 and it was based on results from 105 Texas manufacturers who responded to the survey.

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