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In June, Texas factory activity held relatively steady following slight growth in May. The production index rose just 0.4 points to 1.3, indicating mild growth. The new orders index remained negative but improved, rising to -7.3 from -8.7 in May. The capacity utilization index also increased but remained negative, up 0.5 points to -1.0, while the shipments index turned negative, decreasing nearly eight points to -7.3.

Perceptions of manufacturing business conditions continued to worsen in June but at a slower rate of decline than the prior month, with the general business activity index rising 2.6 points to -12.7. The company outlook index also improved while remaining negative, increasing to -8.9 from -11.3. Meanwhile, the outlook uncertainty index, which has been volatile in recent months, advanced further in June, ticking up 2.5 points to 15.2. The series average is 17.2.

Labor market indicators suggested an increase in head counts and shorter workweeks in June, with the employment index rising 2.2 points to 5.7, while the hours worked index retreated further into negative territory to -8.4. Nearly 18% of firms reported net hiring, while a smaller percentage (12.1%) noted net layoffs.

Historically high upward pressure on prices worsened in June, while wage growth remained relatively stable. The prices paid for raw materials index increased slightly, from 40.7 to 43.0. Meanwhile, the prices paid for finished goods index jumped 11 points to 26.1, three times the series average. On the other hand, the wages and benefits index slipped from 15.0 to 13.4, below the series average of 21.1.

The outlook for future manufacturing activity softened from May, with the future production index falling from 31.1 to 22.6. Meanwhile, the future general business activity index and the future company outlook index both improved significantly, rising 13.1 points and 10.8 points to 14.4 and 16.4, respectively.