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Texas Fed Manufacturing Activity Expands at a Faster Pace in December
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Expansion in Texas factory activity picked up in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rebounded from 7.2 to 25.5, indicating an acceleration in output growth.
Other measures of manufacturing activity also point to stronger growth this month. The new orders index pushed up 11 points to 17.8, and the growth rate of orders index rose from 9.7 to 16.5. The capacity utilization index moved up 11 points to 17.7, and the shipments index advanced from 13.7 to 21.9.
Perceptions of broader business conditions continued to improve in December. The general business activity index remained positive but edged down from 12.0 to 9.7. Meanwhile, the company outlook index pushed further into positive territory, rising from 11.0 to 16.8. Uncertainty regarding companies’ outlooks continued to rise; the index increased six points to 13.4.
Labor market measures indicated an increase in employment and work hours. The employment index increased from 11.7 to 19.6, suggesting a pickup in hiring. Thirty percent of firms noted net hiring, while 10 percent noted net layoffs. The hours worked index held steady at 9.3.
Price and wage pressures accelerated in December. The raw materials prices index shot up 14 points to 49.0, a two-year high. The finished goods prices index rose notably as well, pushing up 13 points to 17.4, also a two-year high. The wages and benefits index edged up to 19.1 and is back in line with its series average, pulling out of a slump that began in March.
Expectations regarding future activity remained positive in December, though some key indexes moved down from their November readings. The future production index rose seven points to 47.3, while the future general business activity index moved down eight points to 17.6. Other measures of future manufacturing activity showed mixed movements but remained solidly in positive territory.
Posted: December 28, 2020 Monday 10:30 AM