Texas Manufacturing Outlook Survey
Texas manufacturing activity rebounds in October
For this month’s survey, Texas business executives were asked supplemental questions on credit conditions. Results for these questions from the Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey have been released together. Read the special questions results.
Texas factory activity rose notably in October, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, shot up 18 points to 14.6, its highest reading in more than two years.
Other measures of manufacturing activity were mixed. The new orders index remained negative at -3.7, indicating slight declines in demand. Meanwhile, the capacity utilization and shipments indexes posted large gains and moved into positive territory, coming in at 4.3 and 1.5, respectively.
Perceptions of broader business conditions remained negative in October, though pessimism waned a bit. The general business activity index moved up six points to -3.0, and the company outlook index edged up three points to -3.3. The outlook uncertainty index held steady at 16.4.
Labor market measures suggested employment declines and shorter workweeks this month. The employment index fell eight points to -5.1. Fourteen percent of firms noted net hiring, while 19 percent noted net layoffs. The hours worked index ticked down to -5.5.
Moderate upward pressure on prices and wages continued in October. The wages and benefits index rose five points to 23.5, a reading roughly in line with the historical average. The raw materials prices index inched down to 16.3, while the finished goods prices index was unchanged at 7.4.
Expectations are for increased manufacturing activity six months from now. The future production index moved up to 42.4, its highest reading in nearly three years. The future general business activity index shot up 18 points to 29.6, also a three-year high.
Next release: Monday, November 25
Data were collected Oct. 15–23, and 86 of the 123 Texas manufacturers surveyed submitted a response. 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.
Results summary
Historical data are available from June 2004 to the most current release month.
| Business Indicators Relating to Facilities and Products in Texas Current (versus previous month) | ||||||||
| Indicator | Oct Index | Sep Index | Change | Series Average | Trend* | % Reporting Increase | % Reporting No Change | % Reporting Decrease |
Production | 14.6 | –3.2 | +17.8 | 9.7 | 1(+) | 34.5 | 45.6 | 19.9 |
Capacity Utilization | 4.3 | –7.0 | +11.3 | 7.7 | 1(+) | 24.7 | 54.9 | 20.4 |
New Orders | –3.7 | –5.2 | +1.5 | 5.0 | 8(–) | 23.8 | 48.7 | 27.5 |
Growth Rate of Orders | –11.7 | –8.6 | –3.1 | –0.8 | 6(–) | 16.8 | 54.7 | 28.5 |
Unfilled Orders | –17.5 | –18.0 | +0.5 | –2.3 | 2(–) | 5.0 | 72.5 | 22.5 |
Shipments | 1.5 | –7.0 | +8.5 | 8.0 | 1(+) | 28.5 | 44.5 | 27.0 |
Delivery Time | –11.5 | –7.5 | –4.0 | 0.8 | 19(–) | 4.4 | 79.7 | 15.9 |
Finished Goods Inventories | 2.3 | –3.7 | +6.0 | –3.1 | 1(+) | 16.3 | 69.8 | 14.0 |
Prices Paid for Raw Materials | 16.3 | 18.2 | –1.9 | 27.1 | 54(+) | 21.0 | 74.2 | 4.7 |
Prices Received for Finished Goods | 7.4 | 8.4 | –1.0 | 8.6 | 11(+) | 11.1 | 85.2 | 3.7 |
Wages and Benefits | 23.5 | 18.5 | +5.0 | 21.2 | 54(+) | 23.7 | 76.1 | 0.2 |
Employment | –5.1 | 2.9 | –8.0 | 7.4 | 1(–) | 14.3 | 66.3 | 19.4 |
Hours Worked | –5.5 | –2.5 | –3.0 | 3.2 | 13(–) | 11.5 | 71.5 | 17.0 |
Capital Expenditures | 4.6 | 11.9 | –7.3 | 6.6 | 13(+) | 17.4 | 69.8 | 12.8 |
| General Business Conditions Current (versus previous month) | ||||||||
| Indicator | Oct Index | Sep Index | Change | Series Average | Trend** | % Reporting Improved | % Reporting No Change | % Reporting Worsened |
Company Outlook | –3.3 | –6.4 | +3.1 | 4.4 | 32(–) | 18.1 | 60.5 | 21.4 |
General Business Activity | –3.0 | –9.0 | +6.0 | 0.7 | 30(–) | 15.3 | 66.4 | 18.3 |
| Indicator | Oct Index | Sep Index | Change | Series Average | Trend* | % Reporting Increase | % Reporting No Change | % Reporting Decrease |
Outlook Uncertainty | 16.4 | 17.3 | –0.9 | 17.1 | 42(+) | 23.5 | 69.4 | 7.1 |
| Business Indicators Relating to Facilities and Products in Texas Future (six months ahead) | ||||||||
| Indicator | Oct Index | Sep Index | Change | Series Average | Trend* | % Reporting Increase | % Reporting No Change | % Reporting Decrease |
Production | 42.4 | 35.2 | +7.2 | 36.3 | 54(+) | 47.0 | 48.3 | 4.6 |
Capacity Utilization | 42.0 | 35.3 | +6.7 | 33.2 | 54(+) | 46.9 | 48.2 | 4.9 |
New Orders | 36.6 | 33.3 | +3.3 | 33.6 | 24(+) | 45.1 | 46.4 | 8.5 |
Growth Rate of Orders | 26.0 | 28.9 | –2.9 | 24.8 | 17(+) | 34.8 | 56.4 | 8.8 |
Unfilled Orders | 1.9 | 1.7 | +0.2 | 2.8 | 3(+) | 15.0 | 71.9 | 13.1 |
Shipments | 39.1 | 28.8 | +10.3 | 34.6 | 54(+) | 45.1 | 49.0 | 6.0 |
Delivery Time | 4.7 | 10.7 | –6.0 | –1.4 | 4(+) | 10.0 | 84.7 | 5.3 |
Finished Goods Inventories | –4.9 | –5.0 | +0.1 | –0.1 | 2(–) | 11.1 | 72.8 | 16.0 |
Prices Paid for Raw Materials | 29.3 | 26.5 | +2.8 | 33.3 | 55(+) | 35.7 | 57.9 | 6.4 |
Prices Received for Finished Goods | 19.7 | 17.5 | +2.2 | 20.8 | 54(+) | 22.2 | 75.3 | 2.5 |
Wages and Benefits | 40.3 | 41.9 | –1.6 | 39.3 | 245(+) | 42.0 | 56.3 | 1.7 |
Employment | 28.7 | 19.0 | +9.7 | 22.8 | 53(+) | 33.2 | 62.3 | 4.5 |
Hours Worked | 13.8 | 4.1 | +9.7 | 8.8 | 7(+) | 21.3 | 71.2 | 7.5 |
Capital Expenditures | 12.8 | 23.3 | –10.5 | 19.4 | 53(+) | 21.7 | 69.4 | 8.9 |
| General Business Conditions Future (six months ahead) | ||||||||
| Indicator | Oct Index | Sep Index | Change | Series Average | Trend** | % Reporting Increase | % Reporting No Change | % Reporting Worsened |
Company Outlook | 34.6 | 11.1 | +23.5 | 18.3 | 11(+) | 38.7 | 57.2 | 4.1 |
General Business Activity | 29.6 | 11.4 | +18.2 | 12.3 | 5(+) | 38.5 | 52.6 | 8.9 |
*Shown is the number of consecutive months of expansion or contraction in the underlying indicator. Expansion is indicated by a positive index reading and denoted by a (+) in the table. Contraction is indicated by a negative index reading and denoted by a (–) in the table.
**Shown is the number of consecutive months of improvement or worsening in the underlying indicator. Improvement is indicated by a positive index reading and denoted by a (+) in the table. Worsening is indicated by a negative index reading and denoted by a (–) in the table.
Data have been seasonally adjusted as necessary.
Comments from survey respondents
These comments are from respondents’ completed surveys and have been edited for publication.
- Interest rate impacts continue to put pressure on the overall construction markets and auto industry, which are major customers of the basic materials space.
- Chinese producers are selling chemicals products at prices that are, in some cases, lower than our production costs in the U.S.
- We need more interest rate cuts on leasing capital equipment to see a difference in our industry. Rates are still too high.
- We are expecting a continued period of lower demand and production over the next six to 12 months. We have flexed down our workforce and supplier purchases accordingly.
- We are experiencing inflation-related increases in the cost of doing business across the spectrum of operations with no real way to recoup or have margin protection.
- Sales volume is below projections for fourth quarter 2024. Geopolitical instability is increasing throughout the world, and the U.S. presidential election may create more instability.
- We are seeing increased demand for our products, which is driving the increase in our production.
- We have continuous problems with homeless encampments and property damage at our business location. The city of Dallas holds property owners responsible for cleaning up encampment sites, which are gone one day and back the next. We have to start the entire process over again. This is definitely time wasted for productivity as we have to use our own employees to clean up the sites.
- Business remains slow; however, we are hopeful that after the election, business will pick up (if the "right" candidate wins).
- Geopolitical conflict and aggression wreaks havoc with our planning. Our own election outcome cannot be known soon enough. We have prospective deals of significance on hold pending who takes office. Overall, it's been a really rough year through no apparent fault of our own, but our pivots have yet to yield favorable results despite being as nimble as possible. Hopefully, 2025 will be a year of jubilation!
- A prominent slowing of business began in October 2023, and it has continued to trend lower month over month for the last 12 months.
- We are looking forward to some unity in the country and getting past the election and back to business. We need interest rates to come down and stay low for planning 2025, otherwise we will be having a challenging environment next year.
- Orders and the outlook are trending down at the time.
- We are investing in plant, equipment and processes to add new product offerings to improve business conditions.
- We are now in month two of much slower business activity, something we have avoided for the previous 10 months. Hopefully, things will pick up soon, or else we will need to reduce head count in the plant. Naturally, this comes just as a huge capital expenditure machine has arrived and is in the process of being installed and training beginning.
- We've had a strong October across all buying sectors, which makes us feel better about the short-term market. Long-term uncertainty is still high and unchanged; we've heard there's a lot of uncertainty with the election and a potential East Coast dock strike.
- Our outlook is predicated on the election outcome.
Historical Data
Historical data can be downloaded dating back to June 2004.
Indexes
Download indexes for all indicators. For the definitions of all variables, see Data Definitions.
| Unadjusted |
| Seasonally adjusted |
All Data
Download indexes and components of the indexes (percentage of respondents reporting increase, decrease, or no change). For the definitions of all variables, see Data Definitions.
| Unadjusted |
| Seasonally adjusted |
Questions regarding the Texas Business Outlook Surveys can be addressed to Emily Kerr at emily.kerr@dal.frb.org.
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