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Texas Fed Manufacturing Activity Increased in January
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Texas factory activity increased for the seventh consecutive month in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, edged down but remained positive at 11.9, suggesting output growth continued but at a slightly slower pace this month.
Other measures of current manufacturing activity also indicated expansion. The new orders index climbed to a multiyear high of 15.7, while the growth rate of orders index returned to positive territory, rising 8 points to 6.7. The capacity utilization index posted a seventh positive reading in a row, although it moved down to 9.1 this month. The shipments index rose 10 points to 15.8, with more than a third of manufacturers noting a rise in shipment volumes from December.
Perceptions of broader business conditions improved further this month. The general business activity index posted a fourth consecutive positive reading and moved up to 22.1, its highest reading since April 2010. The company outlook index pushed up to 25.0, also a level not seen since 2010.
Labor market measures indicated employment gains and longer workweeks. The employment index bounced back to 6.1 after dipping into negative territory last month. Twenty-three percent of firms noted net hiring, compared with 17 percent noting net layoffs. The hours worked index moved up to 9.1, its strongest reading since the end of 2015.
Upward price pressures remained relatively strong, and wages continued to rise in January. The raw materials and finished goods prices indexes were nearly unchanged at 30.8 and 17.7, respectively. The wages and benefits index also held fairly steady at 20.8.
Expectations regarding future business conditions generally improved this month. The index of future general business activity edged up to 43.7. The index of future company outlook also inched up, coming in at 48.8. Most other indexes of future manufacturing activity pushed higher into positive territory.
Posted: January 30, 2017 Monday 10:30 AM