Texas Manufactoring Outlook Survey

Growth in Texas manufacturing activity slows amid increased uncertainty

Texas factory activity continued to rise in March, but at a slower pace than the previous month, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell six points to 6.8, a reading suggestive of a below-average pace of output expansion.

Other measures of manufacturing activity also showed signs of slower growth this month. The capacity utilization index moved down five points to 7.2, the new orders index fell to 6.1 from 11.1, and the shipments index fell eight points to 1.8.

Perceptions of broader business conditions were mixed in March. The general business activity index was relatively unchanged at -0.2, with the near-zero reading indicating no change in business activity from February. However, the company outlook index fell into negative territory dropping nearly seven points to -3.5. The outlook uncertainty index shot up 20 points to 26.0, its highest reading since April 2025.

Employment growth stalled and workweeks were flat in March. The employment index came in near zero, with 15 percent of firms noting net hiring and 16 percent of firms noting net layoffs. The hours worked index moved down to 0.9 from 6.1.

Price pressures were little changed while wages grew at a slower pace than last month. Both the finished goods prices index and the raw materials prices index were relatively unchanged at 18.4 and 32.7, respectively. The wages and benefits index fell to 25.2 from 31.9.

Expectations are for increased manufacturing activity six months from now. The future production index held steady at 35.7, and the future general business activity index remained in positive territory but fell two points to 10.6. Other indexes of future manufacturing activity remained in positive territory and increased.

Next release: Monday, April 27