Texas Factory Growth Cools but Stays Solid in October, Dallas Fed Says
The Dallas Fed's October survey showed output and orders slowing from September's pace even as executives grew more upbeat about the next six months.
Texas manufacturing kept expanding in October, but at a slower clip than the month before, according to the Federal Reserve Bank of Dallas.
The Texas Manufacturing Outlook Survey, released Oct. 26, put the general business activity index at 13.4, up from 9.8 in September. Beneath that headline, the picture was more mixed: the production index fell to 15.8 from 29.5, though it stayed above its series average of 9.7, and the new orders index dropped sharply to 9.3 from 30.7. Capacity utilization slipped to 13.7 and shipments eased to 8.4.
Costs and labor
Raw-materials prices remained a pressure point. That index rose to 55.3, far above its 28.1 average, and executives pointed to diesel and other input costs squeezing profitability. Employment growth slowed to 11.6, while the wages and benefits index fell to 20.8 as wage pressures eased. Respondents also cited labor shortages, higher interest rates and trade and geopolitical worries, including USMCA negotiations.
Optimism about what's next
Firms still expect growth to continue. The future general business activity index jumped 17.3 points to 38.1, and the future production index held near 39.4. Data were collected Oct. 13–21 from 64 of the 114 manufacturers surveyed. The next release is due Nov. 30.
Sources: Dallas Fed — Texas Manufacturing Outlook Survey, October 2026.
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