“Texas factory activity was flat in December,” according to the monthly business activity survey conducted by the Federal Reserve Bank of Dallas and released yesterday.

The general business conditions index inched up to 3.8 in December from 0.3 in November.

The production index fell to negative 0.5 from positive 5.9, while capacity use decreased to 0.9 from 1.6. Volume of new orders dipped to 10.0 from 10.5, while growth rate of orders index increased to 11.0 from 10.0.

Unfilled orders narrowed to negative 4.2 from negative 7.3 in the prior survey, the volume of shipments slipped to 2.3 from 4.7, and delivery times improved to negative 3.2 from negative 7.6. The materials inventory index narrowed to negative 21.5 from negative 30.4 and the finished goods inventory bounced to negative 19.8 from negative 21.7.

Prices paid for raw materials moved to 28.7 from 22.0, while prices received for finished goods improved to negative 4.0 from negative 12.3. Wages and benefits reversed to positive 1.1 from negative 2.2,  the number of employees index rose to negative 2.8 from negative 15.1, the average workweek index widened to negative 9.7 from negative 6.5, and the capital expenditures index rose to negative 15.4 from negative 15.5.

As for the future outlook — six months from now — the general business conditions index soared to 31.9 from 15.7 last month, the production index increased to 45.7 from 33.0, and capacity use grew to 40.5 from 28.9, the Fed reported. Volume of new orders surged to 50.5 from 35.6 and the growth rate of orders index climbed to 32.9 from 26.1.

Unfilled orders increased to 14.3 from 1.1, the volume of shipments gained to 43.5 from 31.2, and delivery times improved to zero from negative 3.3. Materials inventories reversed to positive 6.6 from negative 4.4, and the finished goods inventory improved to negative 5.5 from negative 12.1.

Prices paid for raw materials increased to 53.8 from 31.9 and prices received for finished goods rose to 16.5 from 12.1. Wages and benefits jumped to 26.9 from 15.0, the number of employees index soared to 26.4 from 8.8, the average workweek index grew to 25.5 from 9.9, and the capital expenditures index surged to positive 11.3 from negative 5.6.

The Texas Manufacturing Outlook Survey is a monthly anecdotal survey of manufacturers in the state. Roughly 80 manufacturers regularly participate in the Dallas Fed survey, which began collecting data in May 2004.

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