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Texas Fed Manufacturing Activity Continues to Increase Strongly in December 2021
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Texas factory activity increased at an above-average pace in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, held fairly steady at 26.7, a reading indicative of solid output growth.
Other measures of manufacturing activity also indicated continued growth. The new orders index dipped slightly from 19.6 to 18.1—still far above the series average of 6.7. The growth rate of orders index edged down but remained elevated at 13.4. The shipments index ticked down from 24.3 to 19.1, while the capacity utilization index inched up from 26.4 to 27.8.
Perceptions of broader business conditions showed some improvement in December. The general business activity index remained positive but eased nearly four points to 8.1. The company outlook index pushed up from 1.3 to 8.6, its highest reading since August. Uncertainty regarding outlooks continued to rise, though the index retreated to 19.2.
Labor market measures indicated robust employment growth and longer workweeks. The employment index inched up to 30.9, an eight-month high. Thirty-five percent of firms noted net hiring, while 4 percent noted net layoffs. The hours worked index also remained elevated and was largely steady at 19.7.
Prices and wages continued to increase strongly in December. The raw materials prices index remained highly elevated but dropped from its series high to 66.2. The finished goods prices index held steady at 42.3, far exceeding its historical average of 7.7. The wages and benefits index remained near its own series high, at 45.5.
Expectations regarding future manufacturing activity remained positive but less so in December than in November. The future production index fell to 40.6 from 51.7, and the future general business activity index dropped 15 points to 14.0. Other measures of future manufacturing activity such as capital expenditures and employment showed mixed movements but remained solidly in positive territory.
Posted: December 27, 2021 Monday 11:02 AM