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Texas Fed Manufacturing Activity Shows Expansion Continues in January
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Texas factory activity continued to expand in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, remained elevated but retreated to 16.8 after surging to an 11-year high in December.
Most other measures of manufacturing activity also pointed to somewhat slower growth in January after the rapid expansion seen in December. The new orders index moved down from 30.1 to 25.5, and the growth rate of orders index fell six points to 15.5. The capacity utilization index also stayed positive but declined, dropping 12 points to 14.5. Meanwhile, the shipments index rose six points to 27.1, indicating a pickup in growth.
Perceptions of broader business conditions remained highly positive in January. The general business activity index pushed up further to 33.4, its highest reading in more than 12 years. The company outlook index remained elevated but edged down to 27.8.
Labor market measures suggested a slight deceleration in employment growth and longer workweeks this month. The employment index came in at 15.2, down five points from December. More than a quarter of firms noted net hiring, compared with 12 percent noting net layoffs. The hours worked index declined but remained positive at 13.4, suggesting a continued lengthening of workweeks.
Upward pressure on prices and wages remained elevated in January. The raw materials prices index ticked up one point to 33.5, and the finished goods prices index rose four points to 22.3. Meanwhile, the wages and benefits index stayed well above its average reading but inched down to 23.3.
Expectations regarding future business conditions were even more optimistic in January. The index of future general business activity rose four points to 44.5, its highest level since December 2004. The future company outlook index edged up to 43.2, also a relatively high level. Other indexes of future manufacturing activity pushed further into positive territory.
Posted: January 29, 2018 Monday 10:30 AM