The Dallas Fed’s general business activity index for Texas manufacturing slipped to -8.7 in September 2025 from -1.7 in the prior, signaling a second consecutive monthly contraction in manufacturing activity and the steepest since June. The production index, a key measure of state manufacturing conditions, came in at 5.2, down 10 points from August and indicative of below-average output growth. Capacity utilization slipped to 3.9, shipments fell eight points to 6.7, and new orders declined eight points to -2.6, indicating a slight drop in demand after August’s uptick. Labor market measures suggested a slight decline in employment and a slight increase in work hours. The employment index dropped 12 points to -3.4, its lowest reading since April. Price and wage pressures were stable, with raw materials remaining elevated at 43.4. Lastly, the company outlook index neared zero and the outlook uncertainty index edged slightly below average at 13.9.