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The Dallas Fed’s general business activity index for Texas manufacturing rose sharply to 11.6 in August 2026, its highest level since January 2025, up from 1.3 in July. Broader conditions also improved, with the company outlook index climbing 5.8 points to 19.2.
Manufacturing activity accelerated, as production increased (16.1 vs. 10.1), supported by a strong rise in assessments of new orders (22 vs. 6.4) and shipments (14.1 vs. 8.8). Capacity utilization strengthened as well, advancing to 12.8 from 5.9.
Nonetheless, uncertainty remained elevated, reflected in further inventory accumulation and a significant lengthening of delivery times. Employment growth slowed, and work hours were largely stable in August.
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Price pressures were steady but still notably high, with input costs (prices paid) rising further, while prices received eased slightly.
Looking ahead, firms stayed optimistic about activity over the next six months. Expectations improved for both future production (40.9 vs. 34.6) and general business activity (37.2 vs. 26.5).
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