03:41 PM EDT, 10/27/2025 (MT Newswires) -- The Texas manufacturing sector's downturn improved more than anticipated in October amid gains in the demand and employment gauges, data from the Federal Reserve Bank of Dallas showed Monday.

The general business activity index rose to minus 5 this month from minus 8.7 in September. The consensus was for a minus 7.8 reading in a survey compiled by Bloomberg.

The new orders index improved to minus 1.7 from last month's minus 2.6, while the employment gauge swung to 2 from minus 3.4, according to the Dallas Fed.

Some 18% of firms reported net hiring, while 16% noted net layoffs, the survey showed, adding that price and wage pressures "eased" in October.

The production index, which the Fed branch calls a key measure of state manufacturing conditions, held steady at 5.2, indicating "below-average output growth" for a second straight month, it said in a statement. The shipments gauge moved down to 5.8 from last month's 6.7.

"Perceptions of broader business conditions worsened somewhat this month," the Dallas Fed said.

Six months out, expectations for general business activity dropped to 7 in October from 8.4 last month, while the future production measure moved down to 21 from 31.6.

"Expectations for manufacturing activity six months from now remained positive, though optimism waned," the Fed branch said. "Most other indexes of future manufacturing activity also moved down, but remained positive, still indicating increased activity six months ahead."

Last week, data from the Kansas City Fed showed that manufacturing activity in the US Midwest region unexpectedly increased at a faster sequential pace this month, driven by gains in production and shipments. A report by S&P Global ( SPGI ) showed that US private-sector output grew in October at the fastest pace in three months amid gains in both manufacturing and services.

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