01:46 PM EDT, 06/24/2024 (MT Newswires) -- Texas' manufacturing contraction improved slightly less than expected in June, while the six-month outlook rose "notably," according to the Federal Reserve Bank of Dallas.

The general business activity index increased to minus 15.1 this month from minus 19.4 in May, data from the Fed branch showed Monday. Analysts surveyed in a Bloomberg poll were expecting a month-over-month improvement to minus 15.

Production, which the Dallas Fed calls a key measure of state manufacturing conditions, swung to 0.7 from minus 2.8. Shipments jumped to 2.8 from minus 3, while new orders improved to minus 1.3 from minus 2.2, the regional Fed's survey showed.

"New orders have been declining for most of the year but stabilized, and employment fell slightly on net," said Emily Kerr, senior business economist at the Dallas Fed. "Firms' perceptions of broader business conditions continued to worsen in June, though they were less negative than in May."

The employment index rose to minus 2.9 from minus 5.3. Roughly 17% of firms reported net hiring in June, while 20% reported net layoffs. Labor market gauges indicated "slight employment declines and shorter workweeks" this month, the Fed branch said. Upward pressure on prices and wages continued, according to the report.

Six months out, the gauge for general business activity jumped to 12.9 in June -- its highest reading since early 2022 -- from minus 3.3 last month, the regional Fed said. The future production index surged to 27.1 from 17.3, while the forward-looking indicators for new orders and shipments increased by 16.6 and 12.9 points to 29.8 and 28.1, respectively.

Over the next year, firms expect easing in wage and price pressures, Kerr said. "When asked about concerns around their firm's outlook, business executives continued to cite weakening demand as their number one concern," Kerr wrote. "Domestic policy uncertainty and elevated inflation were also top concerns."

Last week, the New York Fed said New York manufacturing activity improved more than expected in June but remained in contraction territory as orders and shipments improved, while the outlook for business activity six months out reached a more than two-year high.