Ike dampens Texas manufacturing - US Fed

29 September 2008 22:57  [Source: ICIS news]

HOUSTON (ICIS news)--Texas manufacturing in September plunged to its lowest level in at least four years largely as a result of Hurricane Ike, according to a survey released on Monday by the US Federal Reserve Bank of Dallas.

“Most indicators of current production and general business conditions recorded their lowest readings since the survey’s inception in 2004,” the Federal Reserve Bank said.

“Respondents largely attributed the weakness to Hurricane Ike hitting the Texas Gulf coast on September 13 and leading to widespread factory closures in the area,” the report continued.

Hurricane Ike caused several chemical plant shutdowns and force majeure (FM) declarations.

September’s production index was -21.4, compared with 0.0 in August.

Each index is calculated by subtracting the percentage reporting a decrease from the percentage reporting an increase.

The capacity utilisation index in September was -18.5, compared with 0.9 in August.

The indexes for volume of shipments, volume of new orders and growth rate of orders also plunged, according to the Federal Reserve Bank.

Sentiment on general business conditions remained subdued. Half of those responding said the economy had worsened since August.

Texas manufacturers indicated they expect improvement in business conditions over the next six months.

The indexes for future production, capacity utilisation, volume of shipments and volume of new orders improved, according to the survey, with nearly 40% of the producers saying they are expecting an increase in those measures over the next six months.

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By: Brian Ford
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