Activity at Texas factories continued to bounce back in November, posting a fifth straight month of production gains, according to a report Monday from the Federal Reserve Bank of Dallas.
The state production index, a key measure of factory activity, rose 2.1 points to a reading of 8.8 for the month, according to the Texas Manufacturing Outlook Survey.
The increase indicates factory output has continued to expand at least since July, when the index barely recorded a positive reading after dipping into negative territory at -7 in June and -13.1 in May. Positive readings generally indicate expansion of factory activity, while readings below zero generally indicate contraction, the Dallas Fed says.
The state production index tracks closely with the overall Texas GDP, so it provides one of the most current readings of broader economic conditions across the state. Texas produces more than 11 percent of total manufactured goods in the United States, ranking second behind California in factory production, the Dallas Fed says.
Additional measures of Texas’ current manufacturing activity were mixed — the capacity utilization index rose 3 points to 3.6, while the shipments indexes saw a dip to -1.9.
The survey’s “demand indicators” — or measures of underlying production factors — remained in negative territory this month, the Dallas Fed said.
The new orders and growth rate of orders indexes posted their third consecutive negative readings in November, but also showed smaller declines.
Overall, the state’s manufacturing sector posted employment gains in November, according to the Dallas Fed. The employment index was at 4.5 after a nearly flat reading the previous month, the Dallas Fed said. In September, the employment index posted its first positive reading in nine months.
The hours worked index also returned to positive territory at 2.5. It was -1.8 in October.
The report also found that perceptions of broader business conditions improved “markedly” in November, with the general business activity shooting up to 10.2 after nearly two years of negative readings, the Dallas Fed said. The company outlook index saw a large gain as well, increasing 9 points to a reading of 11.
Manufacturing executives expressed more optimism in the November survey, with the index of future general business activity posting a positive jump to 31.6, up from 4.8 in October. The index of future company outlook also increased for the month to 34.9, up more than 20 points from a month earlier.