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Dallas Fed: Texas manufacturing activity contracts in January

DALLAS—Texas factory activity contracted in January after stabilizing in December, according to business executives responding to the Federal Reserve Bank of Dallas’ Texas Manufacturing Outlook Survey.

“Texas’ manufacturing sector contracted in January, with declines seen in production, new orders and employment, among other measures of factory activity,” said Emily Kerr, senior business economist at the Dallas Fed. “While the survey report was quite negative regarding developments over the prior month, indexes looking at expectations for six months ahead broadly moved up in January.”

Key takeaways from this month’s survey:

  • The production index dropped 17 points to -15.4—its lowest reading since mid-2020.
  • The new orders index ticked down from -10.1 to -12.5.
  • Labor market measures suggested employment declines and shorter workweeks in January.
  • The general business activity index fell from -10.4 to -27.4, and the company outlook index fell from -9.4 to -18.2.
  • The future production index—measuring expectations six months ahead—moved up 10 points to 21.7.

The Dallas Fed asked a series of special questions on the labor market in the Texas Business Outlook Surveys and heard back from 372 business executives (services and manufacturing) Jan. 16–24.

“Just shy of half of firms reported they were currently trying to hire, and a lack of applicants remained the top hiring impediment though slightly fewer noted it in January versus the last time we asked, in July 2023,” Kerr said. “Firms overall said applicant availability continues to improve and said their ability to retain workers improved on net over the past month as well.”


Media contact:
Jon Prior
Federal Reserve Bank of Dallas
Phone: 214-922-6857