Texas factory activity expanded at a markedly faster pace in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, surged 15 points to 19.9, indicating a sharp acceleration in output growth.
Other measures of manufacturing activity also point to more rapid growth this month. The new orders index rose seven points to 13.0, and the growth rate of orders index rose six points to 11.6. The capacity utilization index pushed up from 9.2 to 16.5, and the shipments index edged up three points to 16.1.
Perceptions of broader business conditions continued to improve in February. The general business activity index shot up 10 points to 17.2. The company outlook index held steady at 10.7, an above-average reading. Uncertainty regarding companies’ outlooks continued to rise, though the index retreated notably, from 19.3 to 8.5.
Labor market measures indicated robust but slightly slower growth in employment and work hours. The employment index came in at 12.7, down from 16.6 but still indicative of increased head counts. Twenty-one percent of firms noted net hiring, while 8 percent noted net layoffs. The hours worked index inched down to 11.3.
Price pressures rose while wage pressures held mostly steady in February. The raw materials prices index edged up to a 10-year high of 57.4 amid widespread reports of supply-chain disruptions driving up costs. The finished goods prices index climbed nine points to 23.0. The wages and benefits index was largely unchanged at 16.1.
Expectations regarding future manufacturing activity remained positive in February, though some key indexes weakened slightly from their January readings. The future production index ticked down from 43.7 to 40.2, but the future general business activity index moved up four points to 33.9. Most other measures of future manufacturing activity edged down but remained solidly in positive territory.
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