“Texas manufacturing weakened further in September. Most indicators of current production and general business conditions recorded their lowest readings since the survey’s inception in 2004,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas and released yesterday.
“Respondents largely attributed the weakness to Hurricane Ike hitting the Texas Gulf Coast on Sept. 13 and leading to widespread factory closures in the area. Some indexes for activity six months from now remained positive and improved notably, suggesting producers expected growth to recover in the near future,” the Fed said.
The general business conditions index widened to negative 39.6 in September from negative 18.8 in August.
The production index slumped to negative 21.4 from zero, while capacity use dropped to negative 18.5 from positive 0.9, the Fed reported. Volume of new orders slid to negative 27.1 from negative 14.6, while the growth rate of orders index declined to negative 35.9 from negative 18.4.
Prices paid for raw materials slid to 27.2 from 51.5, prices received for finished goods dipped to 8.7 from 21.6, wages and benefits dropped to 13.6 from 17.5, and the number of employees index widened to negative 8.8 from negative 6.9.
As for the future outlook — six months from now — the general business conditions index widened to negative 16.8 in September from negative 6.1 in August, the production index increased to 25.5 from 14.8, and capacity use rose to 21.5 from 10.8, the Fed reported. Volume of new orders grew to 23.6 from 10.8, while growth rate of orders index increased to 16.9 from 7.8.
Prices paid for raw materials fell to 31.6 from 45.1, prices received for finished goods dropped to 25.5 from 37.6, wages and benefits remained 35.3, and the number of employees index gained to 3.9 from 2.9.