02:30 PM EDT, 10/28/2024 (MT Newswires) -- Texas manufacturing activity unexpectedly improved this month into shallower contraction territory as production swung positive, according to the Federal Reserve Bank of Dallas.

The general business activity index moved up to minus 3 in October from minus 9 in September, the Dallas Fed's manufacturing outlook survey showed Monday. Analysts surveyed in a Bloomberg poll were expecting a month-over-month dip to minus 9.2.

Production, which the Fed branch calls a key measure of state manufacturing conditions, rebounded to 14.6 from minus 3.2. New orders edged up to minus 3.7 from minus 5.2, the regional Fed's survey showed. Shipments swung to 1.5 this month after posting a minus 7 reading in September.

"The Texas manufacturing sector saw a strong rise in production in October, but other survey measures of factory activity and employment were more mixed," said Emily Kerr, senior business economist at the Dallas Fed. "Expectations for future production and business conditions moved markedly higher."

The employment index fell into negative territory at minus 5.1 from positive 2.9 in September, according to the Fed branch. About 14% of firms reported net hiring in October, while 19% reported net layoffs.

The prices paid for raw materials index dipped to 16.3 in October from 18.2 in September while the gauge for prices received for finished goods edged down one point to 7.4. "Moderate upward pressure on prices and wages continued in October," the Dallas Fed wrote.

Six months out, the gauge for general business activity rallied more than 18 points to 29.6 in October. The future production index climbed to 42.4, its highest reading in nearly three years, from 35.2, according to the Fed branch.

Forward-looking indicators for new orders increased by 3.3 points to 36.6 and by about 10 points to 39.1 for shipments. Firms indicated that they expect slight increases in both raw material and selling prices over the next six months.