Business conditions in Texas-area manufacturing continued to expand at a solid pace in February, according to a report released Monday by the Federal Reserve Bank of Dallas.
The bank said its general business activity index increased to 17.8 in February from a 15.3 in January. That's the highest reading since November 2010. The company outlook index also reached a level not seen since 2010, advancing from 13.5 to 15.8.
Readings below zero indicate contraction, and positive numbers indicate expansion.
Other measures of current manufacturing conditions also indicated improvement in February.
The production index, a key measure of state manufacturing conditions, rose from 5.8 to 11.2, suggesting a pickup in the pace of growth.
The new orders index was positive for a second month in a row but fell from 9.5 to 5.8. Similarly, the shipments index moved down from 6.1 to 4.2, while capacity utilization increased further in February.
Labor market indicators reflected a sharp increase in hiring and longer workweeks. The employment index jumped to 25.2, its highest level since the beginning of 2006.
Prices and wages increased in February. The raw materials price index was 25.2, little changed from January. The finished goods price index climbed from 9 to 16.2, suggesting selling prices rose at a faster pace. The February wages and benefits index was 18.4, indicating a continued rise in labor costs.
Dallas-area manufacturers were more optimistic about the future. The expectations index covering the outlook for each business executive's company six months ahead came in at 24.2, down from 27.9 last month, while the expectations about general business activity moved down from 22.3 to 15.9.
Most other indexes for future manufacturing activity also receded slightly, but all remained in solid positive territory.
The jobs expectations index that looks out six months increased to 32.9 from 25.5.