News & Insights

In March, Texas factory activity expanded but at a weaker pace after improving the prior month. The production index decreased from 12.5 to 6.8, falling below the series average of 9.6. The new orders index declined 5.0 points to 6.1, while the capacity utilization index stepped down 4.6 points to 7.2. Meanwhile, the shipments index fell 8.1 points to 1.8. The Eleventh District consists of all of Texas, northern Louisiana and southern New Mexico.

Perceptions of manufacturing business conditions weakened slightly in March, with the general business activity index edging down 0.4 points to -0.2. At the same time, the company outlook index also turned negative, falling 6.6 points to -3.5. Moreover, the uncertainty index jumped 19.5 points to 26.0, rising above the series average and to its highest reading since April 2025.

Labor market indicators suggested a decline in headcounts and a virtually unchanged workweek in March, with the employment index decreasing 8.5 points to -1.0 and the hours worked index declining 5.2 points to 0.9. Nearly 15.0% of firms reported net hiring, while a larger percentage (16.0%) noted net layoffs.

Price pressures strengthened slightly, while wage pressures weakened in March. The prices paid for raw materials index inched up 1.0 point to 32.7. Meanwhile, the prices received for finished goods index ticked up 0.5 points to 18.4, both higher than the series averages. The wages and benefits index fell 6.7 points to 25.2, remaining above the series’ average of 21.0.

The outlook for future manufacturing activity weakened in March, despite the future production index improving 1.4 points to 35.7. Moreover, the future company outlook index declined 7.5 points to 18.2, while future general business activity decreased 2.1 points to 10.6, with both indexes dipping below the series’ averages.