Texas’ manufacturing sector expanded in March, though at a slower rate, according to the latest Dallas Federal Reserve survey. This indicates a loss of momentum across the industry.
Key Findings
- Production index: 6.8 (down from 12.5 in February)
- Growth remained positive but fell below the historical average.
- New orders, shipments, and capacity utilization all declined.
- Employment declined slightly, with more firms reporting job reductions than increases.
Labor and Activity Trends
- Employment growth stagnated.
- Workweeks remained flat
- Broader business indicators reflected mixed results.Rising Uncertainty
The survey highlighted a significant rise in business uncertainty:38% of respondents reported increased uncertainty
- Only 12% reported a decrease.
Executives identified geopolitical tensions, especially the conflict involving Iran, as a major concern.
External Pressures
Manufacturers reported several external challenges:
- Rising energy and shipping costs
- Disruptions linked to the Strait of Hormuz
- Ongoing concerns about tariffs and policy instability
Some firms noted limited opportunities, such as potential demand increases for U.S. producers resulting from global supply disruptions.
Outlook
Despite current challenges, analysts expect modest job growth in Texas in 2026. However, ongoing global uncertainty continues to affect the near-term outlook.
Source: Trevor Bach, The Dallas Morning News
https://www.dallasnews.com/business/economy/article/texas-manufacturing-sees-slowdown-march-22184251.php