Business activity in the southern region of the country expanded at an accelerated pace in December, according to a new report from the Federal Reserve Bank of Dallas. Specifically, the 11th Fed district's headline index jumped to 29.7 this month, significantly better than expected and the highest reading since March 2006.
Under the hood, measures of production, capacity utilization, new orders, shipments, profit margins, employment, hours worked, wages/benefits, and business investment all improved in December. Forward-looking (six months ahead) activity gauges were also generally positive in December, and more manufacturers reported plans to boost capital expenditures. Comments from surveyed managers were a bit more mixed this month, but one respondent said that “With the passage of the tax relief bill, my feeling is that the manufacturing segment of the economy will continue to grow at a faster pace. The biggest problem for most manufacturing companies will be finding and hiring competent employees.”
Sources: Econoday, FRBDPost author: Charles Couch