October 27, 2025
Modest output growth continues in the Texas manufacturing sector
Texas factory activity continued to expand in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was unchanged at 5.2, indicating below-average output growth for the second consecutive month.
Other measures of manufacturing activity moved down or held steady this month. The new orders index was little changed at -1.7, with the negative reading indicating a slight decline in demand in October. The capacity utilization index slipped to -1.1 from 3.9. The shipments index held fairly steady at 5.8.
Perceptions of broader business conditions worsened somewhat this month. The general business activity index increased four points but remained in negative territory at -5.0. Outlooks were stable, with the company outlook index coming in at -0.3 in October. However, the outlook uncertainty index increased eight points to 22.2.
Labor market measures suggested a slight increase in employment, but a contraction in work hours in October. The employment index rose five points to 2.0. Eighteen percent of firms noted net hiring, and 16 percent noted net layoffs. The hours worked index retreated nine points to -5.5, suggesting shorter workweeks in October.
Price and wage pressures eased this month. The raw materials prices index fell ten points to 33.4. The finished goods prices index edged down to 7.7 from 11.7. The wages and benefits index fell two points to 14.2, below its average reading.
Expectations for manufacturing activity six months from now remained positive, though optimism waned. The future production index fell to 21.0 from 31.6, while the future general business activity index edged down to 7.0. Most other indexes of future manufacturing activity also moved down but remained positive, still indicating increased activity six months ahead.
Next release: Monday, November 24
Data were collected Oct. 14–22, and 73 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.