Texas factory activity expanded solidly in January after contracting in December, according to business executives responding to the Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas.
The production index, a key measure of state manufacturing conditions, jumped to 11.2 from -3.0, a reading suggestive of an above-average pace of output expansion. Other indicators of manufacturing activity also rebounded during the month. The new orders index increased 18 points to 11.8, while the capacity utilization index moved up 12 points to 7.1. The shipments index rose to 12.0 from -10.5.
Perceptions of broader business conditions stabilized in January. The general business activity index increased 10 points to -1.2, with the near-zero reading indicating no change in activity from December. The company outlook index rebounded into positive territory at 2.9, up from -12.3, signaling a slight improvement in outlooks. The outlook uncertainty index increased to 4.8 but remained well below its average reading.
Employment growth resumed in January, though work hours were flat. The employment index increased 10 points to 8.2. The hours worked index rose to 0.7 from -7.8, with the near-zero reading indicating no change for the month.
Price pressures were mixed. Selling price pressures increased, with the finished goods prices index rising 10 points to 18.5. Input price pressures were little changed, as the raw materials prices index held at 37.1. Wage growth slowed slightly, with the wages and benefits index falling four points to 17.4.
Expectations pointed to increased manufacturing activity six months from now. The future production index was largely unchanged at 29.2, while the future general business activity index increased six points to 16.6. Other measures of future activity showed mixed movements but remained in positive territory.
Data were collected Jan. 13–21, with 82 of 116 Texas manufacturers surveyed submitting responses. The next survey release is scheduled for Monday, Feb. 23.