03:02 PM EST, 12/30/2024 (MT Newswires) -- Texas manufacturing activity unexpectedly returned to growth territory as production rebounded, while expectations on the six-month horizon soured, according to the Federal Reserve Bank of Dallas.

The general business activity index moved up to a reading of 3.4 in December from minus 2.7 in November, the Dallas Fed's manufacturing outlook survey showed Monday. Analysts surveyed in a Bloomberg poll were expecting a month-over-month dip to minus 3.

Production, which the Fed branch calls a key measure of state manufacturing conditions, swung positive to 3.9 from minus 0.9 the month prior. New orders improved by 11 points to minus 0.9 in December, the regional Fed's survey showed. The shipments index increased to minus 2 this month from minus 5.9 in November.

The index charting employment dipped to 0.3 this month from November's 4.9. reading. About 16% of firms in the survey noted net hiring, equal to the share that reported net layoffs.

Prices paid for raw materials plunged 18 points to 10.5, its lowest reading in 17 months. The selling prices index fell more than 12 points to minus 3.4, its first negative reading since late 2023, according to the regional Fed.

"Labor market measures suggested employment and workweeks held steady," said Isabel Brizuela, a business economist at the Dallas Fed. "Upward pressure on raw material prices eased, and selling prices dipped."

Six months out, expectations for general business activity decreased to 20.6 in December from 31.2 in November while the future production index dropped by more than 11 points to 32.7, according to the Fed branch's report.

The forward-looking indicator for new orders fell to 35.4 from 44.9 while the shipments gauge dipped 4.1 points to 33.7. The future employment index ticked up nearly three points while the price gauges cooled.