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Texas Fed Manufacturing Activity Increased Again in December
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Texas factory activity increased for the sixth consecutive month in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose five points to 13.8, suggesting faster output growth this month.
Most other measures of current manufacturing activity indicated expansion, although demand growth remained slightly negative. The new orders index climbed nine points to 7.3, posting its first positive reading in four months. However, the growth rate of orders index stayed slightly negative, edging down to -3.4. The capacity utilization index shot up 10 points to 13.8, its highest reading in more than two years. The shipments index rebounded from a dip into negative territory last month, climbing seven points to 4.7.
Perceptions of broader business conditions improved again this month. The general business activity index posted a second consecutive positive reading and moved up to 15.5. The company outlook index posted a similar gain, increasing six points to a reading of 17.4.
Labor market measures indicated slight employment declines and modestly longer workweeks. The employment index dipped to -2.9 after three months in positive territory. Seventeen percent of firms noted net hiring, compared with 20 percent noting net layoffs. The hours worked index came in at 2.7, largely unchanged from last month’s reading and indicative of a slight increase in workweek length.
Prices and wages rose in December. Input cost increases accelerated markedly, with the raw materials prices index rising 10 points to 28.1. The finished goods prices index also rose notably, climbing from 8 to 14.7 and reaching its highest level since early 2012. Wages and benefits continued to rise, with the index edging up to 18.7.
Expectations regarding future business conditions improved notably this month. The index of future general business activity advanced 8 points to 39.7. The index of future company outlook posted a double-digit increase and came in at 46.8, its highest reading in 12 years. Most other indexes for future manufacturing activity pushed higher in to positive territory.
Posted: December 27, 2016 Tuesday 10:30 PM