Texas Manufacturing Starts the Year with Strong Rebound, Dallas Fed Reports
By Isbac Martínez
January 28, 2026
Manufacturing activity in Texas showed a significant rebound in January after contracting in December, according to the Texas Manufacturing Outlook Survey released by the Federal Reserve Bank of Dallas.
The production index, a key measure of state manufacturing performance, surged from -3.0 to 11.2 points, signaling growth at a pace above the historical average. The improvement was accompanied by broad-based gains across other major sector indicators.
The new orders index rose 18 points to 11.8, while capacity utilization increased to 7.1. The shipments index posted a strong recovery, climbing from -10.5 to 12.0 points, indicating renewed demand and higher goods movement.
Business Conditions and Labor Market Stabilize
Perceptions of the broader business environment remained relatively stable. The general business activity index came in at -1.2, near neutral and largely unchanged from the prior month. Meanwhile, the company outlook index returned to positive territory at 2.9 points, reflecting a modest improvement in expectations.
Texas’ manufacturing labor market also showed signs of strengthening. The employment index increased by 10 points to 8.2, indicating renewed job growth, while hours worked remained mostly unchanged.
Prices and Outlook for the Months Ahead
On pricing trends, the report noted an increase in finished goods prices, with the related index reaching 18.5 points, while raw material costs remained stable. Wage and benefit growth, however, showed a slight deceleration.
Looking ahead, manufacturers maintain an optimistic medium-term outlook. The future production index stood at 29.2, and the future general business activity index rose to 16.6, suggesting expectations of stronger manufacturing activity over the next six months despite ongoing economic challenges.
The January data points to renewed momentum for Texas’ industrial sector, reinforcing the state’s role as one of the leading manufacturing hubs in the United States.