Dallas Fed: Texas Mfg Up in Jan Despite Higher Costs


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   DALLAS, TX (DTN) -- Texas factory activity rebounded sharply in January 
following December's contraction, with current-month production and new orders 
signaling an above-average pace of expansion despite higher costs, the Dallas 
Federal Reserve said Monday (1/27).

   Industry representatives, however, express skepticism about the 
sustainability of the growth reported in the latest Texas Manufacturing Outlook 
Survey, citing geopolitical uncertainty and rising labor costs.

   The Texas factory production index, a primary gauge of state manufacturing 
health, surged 14 points to 11.2 in January, recovering from the December 
reading of -3.0.

   The new orders index jumped 18 points to 11.8, while the capacity 
utilization index climbed 12 points to reach 7.1 during the period.

   The employment index rose 10 points to 8.2, marking a return to headcount 
growth, though the hours worked index remained nearly flat at 0.7 for the month.

   The general business activity index improved 10 points to -1.2, suggesting 
that broader business conditions stabilized near zero in January.

   The future production index remained optimistic with a reading of 29.2, 
while the future general business activity index rose six points to 16.6.

   The survey's respondents said they were navigating a volatile economic 
landscape as global conflicts have created widespread unease.

   Chemical and furniture makers noted that while falling interest rates offer 
some hope, significant uncertainty persists within the automotive, 
construction, and commercial office building markets.

   "On top of previous challenges, some customers have gone out of business," 
said a food manufacturing representative. "Others are struggling with cash flow 
and are demanding or taking longer terms to pay their orders. This has strained 
our cash flow."

    




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