Of the five Federal Reserve districts which have released their October manufacturing surveys – all were in expansion. A complete summary follows.
Analyst Opinion of Dallas Fed Manufacturing Survey
This survey remains in positive territory with new orders improving and unfilled orders improving – and both remaining in positive territory. Even though the overall index declined, what I think is important improved. IMO this is a stronger report than last month.
The expectations from Econoday was 25.0 to 29.0 (consensus 28.0), and the reported value was 17.6. From the Dallas Fed:
Texas factory activity continued to expand in October, albeit at a slower pace, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was positive but declined another six points to 17.6, indicating output growth continued to abate.
Some other indexes of manufacturing activity also suggested slower expansion in October. The capacity utilization index retreated six points to 15.4, while the shipments index fell four points to 16.6. Meanwhile, the new orders index rose—pushing up four points to 18.9—and the growth rate of orders index held steady at 11.0.
Perceptions of broader business conditions improved this month. The general business activity index inched up to 29.4, and the company outlook index climbed seven points to 25.0. Fewer than 3 percent of firms noted that their outlook worsened, the lowest share since 2004. The index measuring uncertainty regarding companies’ outlooks retreated 13 points to 6.9.
Labor market measures suggested rising employment levels and longer workweeks in October. The employment index rose six points to 23.9, a level well above average. Twenty-eight percent of firms noted net hiring, compared with 4 percent noting net layoffs. The hours worked index remained positive but moved down to 6.5.
Price increases accelerated further in October, and wage pressures remained elevated. The raw materials prices index posted a 10-point increase to 54.4, reaching its highest level in seven years. The finished goods prices index also increased, rising four points to 17.5. Compensation costs continued to rise at a faster clip than normal, with the wages and benefits index relatively unchanged at 32.9.
Expectations regarding future business conditions remained positive in October. The indexes of future general business activity and future company outlook remained well above average and came in at 35.6 and 37.3, respectively. Other indexes for future manufacturing activity showed mixed movements this month but remained solidly in positive territory.
