Dallas Fed: Texas manufacturing expansion accelerates notably

"Texas factory activity rose markedly in May, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, increased 10 points to a 12-year high of 35.2, signaling further acceleration in output growth," the Federal Reserve Bank of Dallas noted in its latest report.

Key takeaways:

The capacity utilization index rose notably from 18.7 to 32.2, and the shipments index jumped 20 points to 39.5.

Demand growth picked up as the growth rate of orders index increased eight points to 26.5.

All three measures reached their highest readings since 2006. Meanwhile, the new orders index held steady at 27.7.

The general business activity index rose five points to 26.8, and the company outlook index rose four points to 28.0. 

The employment index pushed up six points to 23.4, its highest reading in six years.

The raw materials prices index and wages and benefits index edged down to 44.0 and 24.3, respectively—still well above their average readings.