The general business activity index in the Texas Manufacturing Survey surged from an already strong 25.4 to 33.4 in December, the highest reading in more than 12 years. The Dallas Federal Reserve said the production index, a key measure of state manufacturing conditions, remained elevated but declined to 16.8.
The anticipated retreat comes after surging to an 11-year high in December. The company outlook index remained elevated but edged down to 27.8.
The new orders index fell from 30.1 to 25.5 and the growth rate of orders index declined 6 points to 15.5. The capacity utilization index also stayed positive but declined, dropping 12 points to 14.5. Meanwhile, the shipments index rose six points to 27.1, indicating a pickup in growth.
Meanwhile, upward pressure on prices and wages remained high in January. The wages and benefits index ticked down to 23.3, but that’s still well above its average reading.
The raw materials prices index ticked up 1 point to 33.5, and the finished goods prices index rose 4 points to 22.3.