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In December, Texas factory activity contracted after rising the prior month. The production index plummeted 23.7 points to -3.2, dropping below the series average of 9.6. Furthermore, most other measures declined notably from November. The new orders index decreased 11.2 points to -6.4. Capacity utilization moved down 23.9 points to -4.5, while shipments plunged 25.7 points to -10.6.

Perceptions of manufacturing business conditions remained negative in December, with the general business conditions index inching down 0.5 points to -10.9. At the same time, the outlook worsened, with the company outlook index falling 5.6 points to -11.9. The uncertainty index weakened 15.7 points to 0, remaining far below the series average of 17.

Labor market indicators suggest a decline in both headcounts and the workweek in December, with the employment index stepping down 2.3 points to -1.1 and the hours worked index falling 17.4 points to -7.5. More than 13% of firms reported net layoffs, while a smaller percentage (12.3%) noted net hiring.

Price pressures were little changed, but wage pressures accelerated in December. The prices paid for raw materials index stepped up 0.7 points to 36. Meanwhile, the prices received for finished goods index decreased 2.6 points to 8.2. The wages and benefits index rose 6.4 points to 21.8, moving above the series average of 21.

The outlook for future manufacturing activity remained positive in December, with the future production index edging up 0.5 points to 34.2. Meanwhile, the future general business activity index ticked down 0.2 points to 10.8, while the future company outlook index inched up 0.3 points to 16.5.