February 23, 2026
Texas manufacturing sector growth remains solid
Texas factory activity continued to rise in February, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, was largely unchanged at 12.5, a reading suggestive of an above-average pace of output expansion.
Other measures of manufacturing activity also showed signs of continued growth this month. The capacity utilization index moved up five points to 11.8, the new orders index was unchanged at 11.1, and the shipments index fell to 9.9 from 12.0.
Perceptions of broader business conditions were stable in February. The general business activity index edged up to 0.2 from -1.2, with the near-zero reading indicating no change in business activity from January. The company outlook index was relatively unchanged at 3.1, with the low February reading signaling a slight improvement in company outlooks. The outlook uncertainty index increased to 6.5 but remained well below its average reading.
Employment growth continued, and workweeks got longer in February. The employment index held steady at 7.5, indicating employment grew at the same pace as last month. The hours worked index moved up to 6.1 from 0.7.
Selling price pressures were little changed, input price pressures eased, and wage growth increased considerably in February. The finished goods prices index held steady at 17.9 and the raw materials prices index fell five points to 31.7. The wages and benefits index rose to 31.9 from 17.4.
Expectations are for increased manufacturing activity six months from now. The future production index increased five points to 34.3, and the future general business activity index remained in positive territory but fell four points to 12.7. Other indexes of future manufacturing activity fell but remained in positive territory, indicating increased activity six months ahead.
Next release: Monday, March 30
Data were collected Feb. 10–18, and 80 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.