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In January, Texas factory activity expanded notably after contracting the prior month. The production index increased from -3.0 to 11.2, moving above the series average of 9.6. The new orders and capacity utilization indexes also turned positive, rising 18.4 points to 11.8 and 11.7 points to 7.1, respectively. Meanwhile, shipments jumped 22.5 points to 12.0. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Consistent with the growth seen across indexes in January, perceptions of manufacturing business conditions strengthened, with the general business activity index increasing 10.1 points to -1.2. At the same time, the company outlook index rose 15.2 points to 2.9. On the other hand, the uncertainty index moved up 4.8 points from 0.0, remaining below the series average of 16.9.

Labor market indicators suggest strong growth in headcounts but almost no change in the workweek in January, with the employment index rising 9.6 points to 8.2 and the hours worked index stepping up 8.5 points to 0.7. Nearly 21.5% of firms reported net hiring, while a smaller percentage (13.3%) noted net layoffs.

Price pressures accelerated while wage pressures weakened in January. The prices paid for raw materials index inched up 1.9 points to 37.1. Meanwhile, the prices received for finished goods index jumped 9.7 points to 18.5, more than double the series average. The wage and benefits index decreased 4.3 points to 17.4, staying below the series average of 20.9.

The outlook for future manufacturing strengthened in January, despite the future production index declining 3.7 points to 29.2. Moreover, the future general business activity index and future company outlook index both moved up, increasing to 16.6 and 23.2, respectively.