Texas Factory Output Held Up at Strong Levels in July -- Dallas Fed
By Xavier Fontdegloria
Texas manufacturing production kept strong momentum in July
compared with the previous month, data from the Federal Reserve
Bank of Dallas showed Monday.
The production index of the Texas Manufacturing Outlook Survey,
a key measure of state manufacturing conditions, increased to 31.0
in July from 29.4 in June. The reading is well above average and
suggests strong output growth, the Dallas Fed said.
The survey is carried out monthly among Texas executives, asking
whether certain parameters such as output, employment or orders
increased, decreased or remained unchanged over the previous
The index for general business activity, which assesses broader
business conditions, fell to 27.3 in July from 31.1 in June. The
reading is below economists' forecasts, who polled by The Wall
Street Journal expected it to come in at 31.6.
Manufacturing activity in Texas has expanded since August 2020.
The industrial sector is growing robustly across the U.S., but
supply-chain bottlenecks and labor shortages are constraining
potential output and factories have been struggling to keep up with
Other measures of manufacturing activity were broadly steady
compared with the previous month, pointing to continued growth, the
Dallas Fed said.
Demand for goods remained strong. The new orders index stood at
26.8, broadly unchanged compared with June, while the growth rate
of orders index edged up to 25.8.
The capacity utilization and shipments indexes held steady at
high levels of 29.9 and 31.6, respectively.
Labor market indicators continued to suggest strong growth in
employment. The employment index came in at 23.7, with 31% noting
net hiring and 8% reporting net layoffs.
The delivery time index edged down to 19.7 from 26.9 the
previous month, signaling somewhat shorter delivery times.
Input prices and wage pressures continued to pick up pace in
July, but showed signs of easing compared with the previous
The raw materials prices index stood at 73.5, down from 80.8 in
June, and the finished goods prices index came in at 40.9 from 42.8
the previous month. The wages and benefits index ticked down to
46.0 from its historical high of 48.1 in June.
Expectations regarding future manufacturing activity remained
optimistic in July, albeit less than in June. The future production
index slipped eight points to 48.4, and the future general business
activity index was unchanged at 37.1. Most other measures of future
manufacturing activity declined but remained in robust growth
territory, the Dallas Fed said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
July 26, 2021 11:08 ET (15:08 GMT)
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