Texas factory activity fell in February after rising notably in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 21 points to -9.1.
Other measures of manufacturing activity also declined this month. The new orders index fell 11 points to -3.5, and the capacity utilization index slid 14 points to -8.7. The shipments index remained positive but edged down to 5.6.
Perceptions of broader business conditions worsened in February. The general business activity index tumbled 22 points to -8.3, and the company outlook index fell 24 points to -5.2. The outlook uncertainty index shot up to 29.2 from a near-zero reading last month, reaching a seven-month high.
Labor market measures suggested flat head counts and shorter workweeks this month. The employment index came in near zero, with 12 percent of firms noting net hiring and an equal share noting net layoffs. The hours worked index slipped to -14.2, its lowest reading since mid-2020.
Input cost pressures intensified in February, while wage pressures retreated slightly. The raw materials prices index pushed up 18 points to 35.0, a multiyear high. The finished goods prices index inched up to 7.8, near its average level. The wages and benefits index edged down to 16.7 from 20.9.
Expectations are for increased manufacturing activity six months from now, though the future indexes retreated from elevated January levels. The future production index fell to 28.3 from 44.8, and the future general business activity index fell to 7.7 from 35.5. Other indexes of future manufacturing activity also fell this month but remained positive.
Next release: Monday, March 31
