Texas Manufacturing Activity Slowed in September
State manufacturers reported a dip in business activity and outlook even as production and order volumes increased.
Updated on Sept. 28, 2026 in Manufacturing
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The Federal Reserve Bank of Dallas reported that the general business activity index for Texas manufacturers declined to 9.8 in September from 11.6 in August. Despite the lower headline index, underlying manufacturing indicators showed conflicting trends in production and forward-looking sentiment.
Why it matters
The drop in company outlook from 19.2 to 8.7 highlights a shift in manufacturer confidence, which can influence capital allocation and hiring decisions in the coming months. Operators must weigh this cooling sentiment against the simultaneous rise in new orders and production output.
The general business activity index reached 9.8 in September, down from 11.6 in August. While the company outlook index fell to 8.7 from 19.2, new orders rose to 30.7 from 22.0 in the same period.
The players
Federal Reserve Bank of Dallas
A regional bank within the Federal Reserve System responsible for monitoring economic data and regional manufacturing conditions.
The details
The Federal Reserve Bank of Dallas collects these index values from state manufacturers to gauge current economic health. While the production index climbed to 29.5 and new orders grew, the finished goods prices index reached 27.6, and raw materials prices increased by eight points. This indicates that while customer demand and output remain active, inflationary pressure on inputs and declining management confidence are exerting downward pressure on the headline activity metric.
Timeline
August 2026: General business activity index stood at 11.6.
September 2026: General business activity index reached 9.8.
Market Landscape
This data update follows the historical reporting pattern of the Texas Manufacturing Outlook Survey. It highlights a divergence often seen in industrial cycles, where current production volumes remain robust even as managers grow more cautious about future conditions.
Owners should monitor the rising cost of raw materials—which increased by eight points—against their own margin buffers. Given the decline in the overall company outlook index, it is prudent to review upcoming capital expenditures for the next quarter.
The takeaway
While new orders are rising, the decrease in the company outlook suggests that manufacturers expect a more difficult environment ahead. Operators should track the finished goods prices index of 27.6 to determine if they can effectively pass rising material costs to customers.
Further reading
For broader trends in the industrial sector, visit our Manufacturing section.
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