January 26, 2026
Growth resumes in Texas manufacturing
Texas factory activity expanded solidly in January after contracting in December, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, jumped to 11.2 from -3.0, a reading suggestive of an above-average pace of output expansion.
Other measures of manufacturing activity also rebounded this month. The new orders index increased 18 points to 11.8, and the capacity utilization index moved up 12 points to 7.1. The shipments index increased to 12.0 from -10.5.
Perceptions of broader business conditions stabilized in January. The general business activity index increased 10 points to -1.2, with the near-zero reading indicating no change in activity from December. The company outlook index rebounded into positive territory, coming in at 2.9, up from -12.3, with the low January reading signaling a slight improvement in company outlooks. The outlook uncertainty index increased to 4.8 but remained well below its average reading.
Employment growth resumed in January, while work hours were flat. The employment index increased 10 points to 8.2. The hours worked index moved up to 0.7 from -7.8, with the near-zero reading indicating no change this month.
Selling price pressures increased, while input price pressures were little changed and wage growth slowed slightly. The finished goods prices index rose 10 points to 18.5. The raw materials prices index was largely unchanged at 37.1, and the wages and benefits index fell four points to 17.4.
Expectations are for increased manufacturing activity six months from now. The future production index was largely unchanged at 29.2, and the future general business activity index increased six points to 16.6. Other indexes of future manufacturing activity showed mixed movements but remained in positive territory, indicating increased activity six months ahead.
Next release: Monday, February 23
Data were collected Jan. 13–21, and 82 of the 116 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.