Texas Manufacturing Growth Rises in June

Manufacturing in Texas rose in June as the perception of business conditions dropped in the month, according to executives polled by the Federal Reserve Bank of Dallas.

The bank said Monday that its production index, a key measure of manufacturing conditions, rose to 8.9 this month from 6.3 in May. However, other manufacturing activity measures showed mixed results, the Dallas Fed said.

The new orders index edged up to 2.7, a reading that is still below average while the growth rate of orders index fell eight points to negative 6.7, the lowest in nearly three years, the Fed said. The capacity utilization index rose almost two points to 9.6, and the shipments index dropped six points to 1.7, a two-year low.

The executives’ view of broader business conditions weakened as the general business activity fell to minus 12.1 from minus 5.3, widely missing Econoday’s view for a reading of minus one.

“Labor market measures suggested solid, but somewhat slower, growth in employment and work hours in June,” the Dallas Fed said. Its employment index slipped nearly three points to 8.8 while 19% reported net hiring and 10% reported layoffs. The hours worked index fell 1.7 points to 4.7.

Input costs were under increased pressure in June, the Fed said, as the raw materials index rose nearly nine points to 16.4. Finished goods edged up five basis points to 1.2, and the wages and benefits index fell more than five points to 22.7.

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