By Xavier Fontdegloria
Factory activity in Texas expanded in October for the fifth straight month, accelerating to a more than two-year high, 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, came in at 25.5 in October, up from 22.3 in September and indicative of a solid expansion of output.
In the survey, researchers at the Federal Reserve in Dallas ask Texas executives about a range of conditions in the industrial sector. They are asked whether certain parameters such as output, employment or orders increased, decreased or remained unchanged over the previous month.
The index for general business activity for August also increased, to 19.8 from 13.6 the previous month, a two-year high, signaling that overall activity in the manufacturing sector is expanding at a quicker pace. Economists polled by FactSet had expected the reading to be broadly unchanged at 13.5.
The new orders index increased to 19.9, up from 14.7 in September. The growth rate of orders index also grew slightly to 14.3 from 13.2 the prior month.
The capacity utilization index climbed to 23.0 in October, up from 17.5 in September, while the shipments index increased marginally to 21.9 from 21.5.
The employment index edged down to 8.7 from last month's 14.5, signalling continuing but less robust hiring. In October, 20% of firms noted net hiring and 11% noted net layoffs.
Expectations regarding future business conditions remained positive, roughly unchanged compared with September, the Federal Reserve Bank of Dallas said.
The future company outlook index decreased to 31.7 in October from September's 32.5, while the future general business activity index grew to 28.4 from the 28.0 level registered the prior month.
Write to Xavier Fontdegloria at firstname.lastname@example.org
(END) Dow Jones Newswires