Texas factory activity, as measured by the production index, “continued to expand in January,” albeit at a slower pace than in December, according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

The general business activity index gained to 33.4 in January from 29.7 in December.

The production index dropped to 16.8 from 32.8.

Capacity utilization decreased to 14.5 from 26.3, the Fed reported. New orders slid to 25.5 from 30.1, while growth rate of orders index declined to 15.5 from 21.4.

Unfilled orders slipped to 7.1 from 9.2, while shipments increased to 27.1 from 21.5, and delivery times grew to 9.0 from 8.0. The finished goods inventory rebounded to zero from negative 2.0. Prices paid for raw materials crept to 33.5 from 32.5, while prices received for finished goods climbed to 22.3 from 17.9. Wages and benefits fell to 23.3 from 25.1, while the employment index dropped to 15.2 from 20.4, and the hours worked index declined to 13.4 from 23.3, and the capital expenditures index rose to 20.0 from 19.0.

As for future outlook (six months from now), the general business conditions index gained to 44.5 from 40.9 last month, the production index grew to 51.6 from 47.4, while capacity use increased to 46.4 from 39.9, the Fed reported. New orders rose to 51.2 from 50.8, while growth rate of orders index climbed to 40.4 from 40.1.

Unfilled orders slid to 14.0 from 16.2, while shipments increased to 50.2 from 46.9, and delivery times dropped to 5.7 from 6.9. The finished goods inventory slipped to 11.7 from 12.4.

Prices paid for raw materials fell to 44.0 from 52.1, while prices received for finished goods slumped to 36.2 from 42.7. Wages and benefits soared to 56.9 from 44.2, the employment index rose to 44.5 from 36.6, while the hours worked index climbed to 14.4 from 13.5, and the capital expenditures index fell to 36.2 from 43.2.

The Texas Manufacturing Outlook Survey is a monthly anecdotal survey of manufacturers in Texas. Over 100 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in May 2004.

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