Dallas Fed: Texas manufacturing activity holds steady in November, outlooks improve

DALLAS—Texas factory activity was flat in November, but demand is expected to pick up over the next six months, according to business executives responding to the Texas Manufacturing Outlook Survey.

“The Texas manufacturing sector saw steady production in November and improved outlooks,” said Emily Kerr, senior business economist at the Dallas Fed. “Hiring resumed and price and wage pressures were moderate.”

Key takeaways from this month’s Texas Manufacturing Outlook Survey: 

• The production index slipped to a near-zero reading after rising to 14.6 last month.
• The new orders index pushed further negative to -11.9, indicating continued declines in demand.
• Labor market measures suggested increased employment and steady workweeks this month.
• Moderate upward pressure on prices and wages was seen in November.
• The general business activity index held steady at -2.7, while the company outlook index moved up nine points to 5.8, its first positive reading since early 2022.

Most Texas businesses expect demand to increase

From Nov. 12–20, the Dallas Fed asked a series of special questions on expected demand and operating margins in the Texas Business Outlook Surveys and heard back from 339 business executives.

Key takeaways:

• Demand expectations pushed notably more positive. Sixty percent of Texas businesses expect demand for their goods and/or services to increase over the next six months. Demand optimism is highest among manufacturers and lowest among retailers.
• Most firms expecting an increase in demand attribute it to an improvement in general economic conditions, rather than something specific to their industry or firm.
• Operating margins have declined slightly over the past six months on net, though they are expected to increase over the next six months.

For more information visit DallasFed.org.  

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Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857
Email: jon.prior@dal.frb.org