Growth in Texas Manufacturing Activity Picks Up Slightly

Texas factory activity continued to expand in April, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, ticked up two points to 12.4, indicating output growth accelerated slightly from March.

Other measures of manufacturing activity also suggested slightly faster expansion in April. The survey’s demand indicators bounced back after dipping last month: The new orders index rose eight points to 9.8, and the growth rate of orders index rose from -2.0 to 5.2. The capacity utilization index pushed to a seven-month high of 15.6, while the shipments index held fairly steady at 6.3.

Perceptions of broader business conditions continued to improve in April. The general business activity index remained positive for a third month in a row but fell five points to 2.0. Meanwhile, the company outlook index climbed two points to 6.3.

Labor market measures suggested weaker employment growth but slightly stronger growth in workweek length in April. The employment index fell eight points to 4.6, its lowest reading since the end of 2016. Nineteen percent of firms noted net hiring, while the share reporting net layoffs rose to 15 percent from 10 percent last month. The hours worked index came in at 8.1, up slightly from March.

Upward pressure on input costs abated somewhat in April, while pressure on selling prices and wages was about the same as it was last month. The raw materials prices index dropped 11 points to 7.9, its lowest reading in three years. The finished goods prices index held steady at 6.0, and the wages and benefits index inched down to 28.2, a still-elevated level.

Expectations regarding future business conditions remained positive in April, although the indexes showed mixed movements. The index of future general business activity remained at its March reading of 18.4, while the index of future company outlook edged up from 18.4 to 20.9. Most other indexes for future manufacturing activity declined this month but stayed in positive territory.



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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya