Texas manufacturers’ growth outlook slows in October, but remains robust: survey

Texas manufacturing growth likely slowed in October compared with September but remained robust compared with October 2025, a new Federal Reserve Bank of Dallas survey shows. The outlook may reflect energy price trends in the Electric Reliability Council of Texas.

Released Oct. 27, the Dallas Fed's monthly Texas Manufacturing Outlook Survey indicated a production index of 15.8%, the difference between the 31.7% of respondents reporting a month-to-month increase and 15.9% reporting a decrease. In September, the production index was 29.5%, and it was 5.5% in October 2025.

The Dallas Fed collected survey results Oct. 13-21 from 64 of 114 Texas manufacturers solicited for input.

Through Oct. 26, ERCOT North Hub day-ahead on-peak locational marginal prices have averaged $35.41/megwatt-hour, down from September's average of $41.47/MWh but up from October 2025's $33.07/MWh.

Platts' Houston Ship Channel spot gas has averaged $2.42/million British thermal units through Oct. 26, down from September's $2.582/MMBtu and October 2025's $2.775/MMBtu.

Weather weakens peakloads

ERCOT peakload averaged less than 66.6 gigawatts through Oct. 25, down sharply from September's average of more than 83.9 GW and slightly below October 2025's 67.2 GW.

Weather may account for some of the peakload difference. Combined heating and cooling degree days through Oct. 25 have been down 54% from September and 7% from October 2025. The National Weather Service defines a degree day as the difference between the average temperature in Fahrenheit (maximum plus minimum, divided by two) and 65 F.

The Midcontinent Independent System Operator's Texas Hub serves much of the East Texas petrochemical complex, and power pricing at that location has been mixed on the month and year. Through Oct. 26, Texas Hub day-ahead on-peak LMPs have averaged $63.23/MWh, down from September's average of $64.92/MWh, but up sharply from October 2025's $40.76/MWh.

"Expectations are for continued growth in manufacturing activity six months from now," the Dallas Fed said. "The future production index was little changed at 39.4%, while the future general business activity index jumped 17 points to 38.1%."

In September, the future production index was 40.3%, and it was 20.2% in October 2025. The future business activity index was 20.8% in September and 7.4% in October 2025.