Texas manufacturing activity rebounded in January, signaling renewed momentum after a brief slowdown at the end of last year. According to the latest Texas Manufacturing Outlook Survey, factory output expanded at an above-average pace, with the production index jumping sharply into positive territory. New orders, shipments, and capacity utilization also strengthened, pointing to healthier demand and improved operating conditions across the sector.
Business sentiment showed signs of stabilization. While overall activity was essentially flat compared with December, company outlooks improved modestly, and uncertainty remained below historical averages. Employment growth resumed, though hours worked held steady, suggesting manufacturers are cautiously adding staff without extending workweeks.
On the cost side, selling price pressures increased, while raw material costs remained unchanged, and wage growth eased slightly. Looking ahead, manufacturers remain optimistic, with expectations for higher production and business activity over the next six months remaining solidly positive.
Source: Federal Reserve Bank of Dallas, Texas Manufacturing Outlook Survey
Original story: https://www.dallasfed.org/research/surveys/tmos/2026/2601