Research >> Economics
Texas Manufacturing Activity Increased
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Texas factory activity increased in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose from 0.2 to 5.8, suggesting growth resumed this month.
Other measures of current manufacturing conditions also indicated growth in January. The new orders index jumped to 9.5, its highest reading in six months, after two months in negative territory. Similarly, the shipments index turned positive after two negative readings, rising from –1.1 to 6.1. Capacity utilization increased further in January; the index moved up from 4 to 8.5. Twenty-eight percent of manufacturers noted higher capacity utilization, the highest share in nine months.
Perceptions of broader economic conditions were notably more positive in January. The general business activity index shot up to 15.3 after dipping into negative territory in December. Nearly a quarter of manufacturers noted improvement in the level of business activity, while nine percent noted a worsening. The company outlook index also increased markedly, rising from 5 to 13.5. Both indexes reached their highest readings in 10 months.
Labor market indicators reflected continued labor demand growth. The employment index came in at 12.2, up from 9.9 in December. Twenty-one percent of firms reported hiring new workers, while nine percent reported layoffs. The hours worked index continued to suggest average workweeks lengthened.
Prices and wages increased in January. The raw materials price index was 24.4, little changed from December. The finished goods price index climbed from –0.8 to 9, suggesting selling prices rose. Forty-seven percent of respondents anticipate further increases in raw materials prices over the next six months, while 32 percent expect higher finished goods prices. The January wages and benefits index came in at 17.5, down slightly from a reading of 19.4 in December but still indicative of rising labor costs.
Expectations regarding future business conditions were markedly more optimistic in January. The index of future general business activity rose sharply from 9.5 to 22.3, reaching its highest level in almost a year. The index of future company outlook came in at 27.9, up from 19.9 last month. Other indexes for future manufacturing activity also increased.
Posted: January 30, 2012 Monday 10:30 AM