December 29, 2025
Texas manufacturing activity dips
Texas factory activity contracted slightly in December after rising notably in November, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 24 points to -3.2, indicating a slight decline in output.
Other measures of manufacturing activity also declined this month. The new orders index fell 11 points to -6.4, and the capacity utilization index plunged 24 points to -4.5. The shipments index fell to -10.6, its lowest reading in 17 months.
Perceptions of broader business conditions worsened in December. The general business activity index remained negative at -10.9, and the outlook index fell further into negative territory to -11.9. The outlook uncertainty index fell 16 points to zero, as an equal share of respondents noted rising and declining uncertainty in outlooks.
Labor market measures suggested flat head counts and a decline in work hours in December. The employment index dipped to -1.1, with the near-zero reading indicating no change. Twelve percent of firms noted net hiring, while 13 percent noted net layoffs. The hours worked index dropped 17 points to -7.5, suggesting shorter workweeks this month.
Price pressures were little changed, while wage growth increased. The raw materials prices index was largely unchanged at 36.0. The finished goods prices index edged down three points to 8.2, a reading in line with its series average of 8.7. The wages and benefits index rose six points to 21.8, in line with its series average of 21.0.
Expectations are for increased manufacturing activity six months from now. The future production index was largely unchanged at 34.2, and the future general business activity index held steady at 10.8. Other indexes of future manufacturing activity showed mixed movements but remained in positive territory, indicating increased activity six months ahead.
Next release: Monday, January 26
Data were collected Dec. 15–23, and 74 of the 115 Texas manufacturers surveyed submitted responses. The Dallas Fed conducts the Texas Manufacturing Outlook Survey monthly to obtain a timely assessment of the state’s factory activity. Firms are asked whether output, employment, orders, prices and other indicators increased, decreased or remained unchanged over the previous month.
Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.