By Xavier Fontdegloria
Manufacturing activity in Texas expanded in December for the seventh consecutive month at a faster pace than that of the previous month, data from the Federal Reserve Bank of Dallas showed Monday.
The production index of the Texas Manufacturing Outlook Survey, a key measure of state manufacturing conditions, was 25.5 in December, sharply up from 7.2 in November and indicative of an acceleration in output growth.
In the survey, researchers at the Federal Reserve in Dallas ask Texas executives about a range of conditions in the industrial sector. They are asked whether certain parameters such as output, employment or orders increased, decreased or remained unchanged over the previous month.
Contrary to the production index, the index for general business activity for December decreased to 9.7 from 12 the previous month, signaling that overall activity in the manufacturing sector softened. This matches economists polled by FactSet, who expected the reading to decline to 10.
Other measures of manufacturing activity point to stronger growth this month, the Dallas Fed said.
The new orders index rose by 11 points to 17.8, and the growth rate of orders index increased to 16.5 from 9.7 the prior month.
The capacity utilization index edged up 11 points to 17.7, while the shipments index increased to 21.9 from 13.7 in November.
The employment index increased to 19.6 in December, suggesting a pickup in hiring, with 30% of respondents noting net hiring and 10% noting net layoffs.
Expectations regarding future business conditions remained positive in December, though some key indexes moved down from their November readings, the Federal Reserve Bank of Dallas said.
The future company outlook index increased to 24.1 in December from 22.5 in November, while the future general business activity index fell to 17.6 from the 25.8 level registered the prior month.
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(END) Dow Jones Newswires
December 28, 2020 11:02 ET (16:02 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.