US February Dallas Fed manufacturing index +0.2 vs -1.2 prior

• General business activity: +0.2 (prev. -1.2)
• Production: 12.5 (prev. 12.2)
• New orders: 11.1 (unchanged)
• Capacity utilization: 11.8 (prev. 6.8)
• Employment: 7.5 (unchanged)
• Hours worked: 6.1 (prev. 0.7)
• Finished goods prices paid: 17.9 (unchanged)
• Raw materials prices paid: 31.7 (prev. 36.7)
• Wages and benefits: 31.9 (prev. 17.4)

Texas factory activity continued to expand in February, with the Dallas Fed’s production index holding largely steady at 12.5, pointing to an above-average pace of output growth. The broader picture from the Texas Manufacturing Outlook Survey was one of stability rather than acceleration, with most indicators suggesting the sector is maintaining its footing without breaking new ground.

The capacity utilization index was a bright spot, climbing five points to 11.8, while new orders held firm at 11.1. Shipments pulled back modestly to 9.9 from 12.0, though still firmly in expansion territory.

The headline general business activity index ticked up to 0.2 from -1.2 — essentially a flat reading that signals no meaningful change in overall conditions from January. Company outlooks were similarly treading water, with that index little changed at 3.1. The outlook uncertainty index crept up to 6.5 but remains well below its historical average, suggesting firms aren’t overly anxious about what’s ahead despite the noise around trade policy.

The labour market side of the survey was solid. Employment growth held its pace with the index steady at 7.5, while hours worked jumped to 6.1 from 0.7, a notable move that could point to firms leaning harder on existing staff rather than ramping up hiring.

The price picture was mixed and worth flagging. Finished goods prices were unchanged at 17.9, but raw materials costs eased, with that index falling five points to 31.7. The standout was wages and benefits, which surged to 31.9 from 17.4 — a considerable acceleration that will catch the eye of anyone watching the inflation pipeline.

Comments in the report:

Beverage and tobacco product manufacturing

• Our sales got off to a surprisingly strong start this year,
  which has us playing catch-up. That, along with a planned shutdown for a
  week in January for annual maintenance, has us scrambling right now.
  Whether these strong sales continue for the year or are just an anomaly
  is unknown, but we are treating this as a trend that will last for most
  of the year.

Computer and electronic product manufacturing

• Extreme volatility in the price of silver has affected us,
  but we have been able to pass price increases through to customers. In
  spite of the AI sound and fury in the stock market, the “real economy”
  continues to chug along. Our customers continue to place regular orders
  and have accepted price increases averaging 5-6 percent over last year.
• Availability dried [up], and prices increased significantly.
  Larger orders that need multiple management approval are difficult to
  manage since prices and availability are unpredictable. Prices tend to
  increase without notice; in some cases, twofold.

Fabricated metal product manufacturing

• We do not have debt, [and we] own our property. But we are
  closing our family business, active since 1958, because customers
  [either] are not buying or [are not] paying on time. Solid production
  demand in first half [of 2026], expected to slow a bit in second half.

Food manufacturing

• The federal and state policy issues have frozen us. which are fine with us.
• Things are looking good, but the week we closed because of the ice storm hurt our local customers and affected us as well.
• Business has been slow.

Machinery manufacturing

• Business remains strong, and we are receiving many new large opportunities.
• The floodgates have opened! What we’ve been praying for and
  hoping for is finally coming to fruition. We look to be firing on all
  cylinders this year and making up for lost time.
• Nice and steady which is good.

Miscellaneous manufacturing

• Tariffs still have an impact in our business; they are a big unknown
• Tariffs are still a problem. Since we’re direct-to-customer,
  it’s also clear that consumers are being negatively impacted by the
  economy. Consumer spending has declined considerably.

Paper manufacturing

• Continued depressed demand.

Printing and related support activities

• It’s just crazy how little demand is out there right now. We
  are seeing some uptick in quoting, and we will soon start to get jobs
  that normally occur in the spring and summer. We blame it all on the
  chaos and lack of consistency coming out of the federal government.

Transportation equipment manufacturing

• The new tariffs are killing small-to-medium-sized
  manufacturing firms in several instances. One such example is the
  importation of tungsten. We purchase tungsten carbide from a U.S. firm,
  but they have no option but to purchase their raw materials from China,
  so the [tariff] costs get passed on to us. Our competitors in Ireland
  and Sweden are able to purchase the material from China with no tariffs
  involved. So, they can manufacture at lower prices and export to the
  U.S. U.S
  US February Dallas Fed manufacturing index +0.2 vs -1.2 prior