By Xavier Fontdegloria
Factory activity in Texas expanded in November for the sixth consecutive month, but its growth pace decelerated markedly compared with October, 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, stood at 7.2 in November, down from 25.5 in September and indicative of a deceleration in output growth.
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 November also decreased, to 12.0 from 19.8 the previous month, signaling that overall activity in the manufacturing sector eased. Economists polled by FactSet had expected the reading to decline to 13.3.
Other measures of manufacturing activity also point to slower growth this month, as the indexes remained positive but came in below last month's readings, the Dallas Fed said.
The new orders index fell 13 points to 7.2, and the growth rate of orders index dropped five points to 9.7.
The capacity utilization index decreased sharply to 6.9 from 23.0 the previous month, while the shipments index fell to 13.7 from 21.9.
Contrary to the general slowing trend, the employment index ticked up three points to 11.7, suggesting a slight pickup in hiring. In November, 25% of firms noted net hiring and 13% noted net layoffs.
Expectations regarding future business conditions remained positive in November, though several key indexes moved down from their October readings, the Federal Reserve Bank of Dallas said.
The future company outlook index decreased to 22.5 in November from 31.7 in October, while the future general business activity index fell to 25.8 from the 28.4 level registered the prior month.
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(END) Dow Jones Newswires
November 30, 2020 11:05 ET (16:05 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.