Texas Factory Activity Extends Losses to September Despite Pickup in Output -- Dallas Fed
By Xavier Fontdegloria
Factory activity in Texas contracted in September for the fifth
consecutive month but manufacturing output expanded, data from the
Federal Reserve Bank of Dallas showed Monday.
The index for general business activity of the Texas
Manufacturing Outlook Survey, which assesses business conditions of
the state's factory sector, decreased to minus 17.2 in September
from minus 12.9 in August.
The index suggests regional activity continued to contract in
September, and did so at a sharper pace than the previous month as
the reading is further from zero.
However, the production index--a key measure of state
manufacturing conditions--rose to 9.3 from 1.2, suggesting that
factory output increased over the month.
Other measures of manufacturing activity showed mixed signals in
September, the Dallas Fed said.
Demand continued to weaken, the data showed. The new orders
index fell to minus 6.4, posting its fourth consecutive month in
negative territory and signaling a contraction in demand. The
growth rate of orders index increased to minus 1.7, while the
shipments index increased to 7.1.
The employment index fell slightly to 15.0 from 15.6, but still
suggested that firms continued to expand their workforce.
Supply-chain strains eased, according to the survey. The
delivery times index edged up to 0.9 from minus 3.5 the previous
month, and the unfilled orders index edged up to minus 0.1,
suggesting backlogs were stable.
Inflation pressures persisted in September. The raw materials
prices index increased to 37.1 from 34.4, ending a three-month
trend of easing price pressures. However, the finished goods prices
index, fell to 18.1 from 26.8, the Dallas Fed said.
Manufacturing firms in Texas remained pessimistic about their
short-term outlook. The future general business activity index fell
to minus 22.4 from minus 8.8. However, the future production index
rose to 28.3 from 23.9, signaling that firms expect strong output
gains in the months ahead.
"Sales have started to slow this summer, as has our general
outlook on business over the short and long term," said one
respondent from the textile product sector. "Inflation and general
uncertainty seem high with customers," it said.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires
September 26, 2022 11:19 ET (15:19 GMT)
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