Dallas Fed sees activity grow, as prices ease in Jan.

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Texas factory activity growth, as measured by the production index, “continued to expand in January,” according to the monthly Texas Manufacturing Outlook Survey conducted by the Federal Reserve Bank of Dallas, released Monday.

“Upward pressure on input prices and wages eased further in January, while pressure on selling prices held steady,” according to the report.

The general business activity index rebounded to positive 1.0 in January from negative 5.1 in December.

The production index grew to 14.5 from 7.3.

Capacity utilization rose to 14.8 from 7.6, the Fed reported. New orders slumped to 11.6 from 14.4, while growth rate of orders index dropped to 1.2 from 5.8.

Unfilled orders climbed to positive 0.2 from negative 2.3, while shipments increased to 11.4 from 6.1, and delivery times narrowed to negative 2.3 from negative 3.2. The finished goods inventory gained at 5.4 from 1.9. Prices paid for raw materials fell to 21.2 from 28.8, while prices received for finished goods dipped to 6.4 from 6.6. Wages and benefits decreased to 27.4 from 29.2, while the employment index dropped to 6.6 from 11.0, and the hours worked index slid to 3.6 from 5.0, and the capital expenditures index rose to 16.0 from 14.2.

As for future outlook (six months from now), the general business conditions index jumped to 11.7 from 3.2 last month, the production index grew to 53.4 from 32.7, while capacity use increased to 48.2 from 30.5, the Fed reported. New orders gained to 44.7 from 32.4, while growth rate of orders index climbed to 38.5 from 23.1.

Unfilled orders rose to 5.5 from 1.4, while shipments grew to 43.7 from 32.4, and delivery times fell to 4.0 from 8.9. The finished goods inventory soared to 8.6 from 2.0.

Prices paid for raw materials declined to 31.8 from 34.3, while prices received for finished goods held 26.7. Wages and benefits grew to 47.7 from 45.0, the employment index surged to 39.4 from 28.2, while the hours worked index gained to 15.6 from 10.8, and the capital expenditures index climbed to 34.2 from 24.7.

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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