The Federal Reserve Bank of Dallas reported that Texas manufacturing expanded at a slower pace in August. The production index in the Texas Manufacturing Outlook Survey registered at 6.8 in August, falling from 19.1 in July.
The new orders index fell 11 points to 2.2. The shipment index registered a 16.4 point drop to 6.4, the lowest reading in eight months. Capacity utilization dropped from an index reading of 18 to 3.6.
Input prices were steady with the raw materials index reading 26.4. Prices for finished products were at a six month high, showing an index reading of 9.1, up from 7.3.
Future expectations for general business conditions edged down one point to 18.7. The index for future company outlook showed more optimism with a jump of 6 points 30.1. Manufacturing activity indexes for the future remained positive.
Survey respondents were asked to comment on the Affordable Care Act and its impact on their businesses. The following are a few comments from those answering the survey.
The Affordable Care Act is such a huge cost increase we must pass it on to our customers or go broke. The projected cost increase is more money than we made last year. This increase will put us at an even bigger cost disadvantage versus imports. We will lose business to imports and plan to reduce our workforce accordingly. – Primary Metal Manufacturer
We are keeping employment levels below the 50 threshold, which we lowered from 70 during the economic downturn. We will continue to study the impact for 2015 if we should consider to continue to rebuild our work force. – Fabricated Metal Manufacturing
We offer health coverage to all of our employees and their families with no monthly deductible. We are being forced to review and modify our benefits package in order to curtail costs. – Fabricated Metal Manufacturing
It is very challenging for a midsize, low-margin, U.S. manufacturer to compete in a global economy when forced to absorb double-digit operating expenses related to increased medical insurance. – Fabricated Metal Manufacturing
The Texas Manufacturing Outlook Survey and additional comments can be accessed at the Federal Reserve site here.
Sandy WilliamsRead more from Sandy Williams
Latest in Economy
Ford of Canada Union Workers Ratify Three-Year Labor Pact
Ford of Canada union workers represented by Unifor ratified a new, three-year labor agreement on Sunday.
ABI Index Drops in August
August’s Architecture Billings Index (ABI) reading from the American Institute of Architects (AIA) and Deltek showed a moderate decrease.
Beige Book: Economic Activity Appears Stable
The US Federal Reserve said that although overall economic activity was modest in July and August, per its latest Beige Book Report released on Sept. 6, the report was still slightly more optimistic than the previous one.
Dodge Momentum Declines in August on Tighter Lending
The Dodge Momentum Index (DMI) moved lower in August, driven by a slowdown in planning from tighter lending standards, according to the latest data from the Dodge Construction Network (DCN).
ISM PMI Shows 10 Months of Decline in Manufacturing Activity
Activity in the US manufacturing sector continues to slow, according to the latest monthly report on business from the Institute for Supply Management (ISM).