Texas business execs were polled by the Federal Reserve Bank of Dallas on credit availability and borrowing conditions to provide data on Texas Manufacturing Outlook, Texas Service Sector Outlook, and Texas Retail Outlook surveys all compiled into one report.
The Manufacturing Index measures performance of the manufacturing sector based on information surveyed from approximately 100 Texan business executives with a figure above 0 representing expansion over the previous month and below zero representing contraction. Texas produces 9.5% of the manufacturing output in the US second only to California in factory production and ranked first in the US as an exporter of manufactured goods.
- The outlook businesses have on their future is at a 14-year high
- Growth decelerated in October but remained positive according to various indexes and surveys
- The employment index is up and well above average
Texas factory growth in October has continued to expand although October was a slower month for growth than the previous month. The production index which measures state manufacturing conditions was positive although fell six points to 17.6, pointing to reduced growth.
Other indexes of manufacturing activity also pointed to slowed expansion - the capacity utilization index sunk six points to 15.4 while the shipments index fell four points to 16.6. However, the new orders index rose four points to 18.9 and the growth rate of orders index saw no change and held firm at 11.0.
Outlooks and Perceptions
Perception of broader business conditions improved in October with general business activity up to 29.4 and the company outlook index up seven points to 25.0. Over 97% of firms reported an equal or improved outlook on the future, the most positive reading since 2004. The index of future general business activity came in at 35.6 and the future company outlook outlook came in at 37.3. Uncertainty regarding company outlook was polled at retreating 13 points to 6.9.
The employment index is up 6 points and now reading at 23.9, well above average. 28% of firms reported net hiring as opposed to only 4% reporting net layoffs - the hours worked index moved down to 6.5 but remained positive as wage pressures elevated and price increases accelerated.
The raw materials prices index rose 10 points to 54.4, a seven-year high, and the finished goods index is up 4 points to 17.5.