03:22 PM EDT, 09/29/2025 (MT Newswires) -- The Texas manufacturing sector's downturn worsened in September, as the demand and employment gauges turned negative, data from the Federal Reserve Bank of Dallas showed Monday.

The general business activity index fell to minus 8.7 this month from minus 1.8 in August. The consensus was for a minus 1.6 reading in a survey compiled by Bloomberg.

The new orders index swung to minus 2.6 from 5.8 month on month, while the shipments gauge fell to 6.7 from 14.2. The employment index reached minus 3.4, swinging from 8.8 sequentially.

The production index, which the Fed branch calls a key measure of state manufacturing conditions, slumped to 5.2 in September from 15.3 last month.

"Expansion in the Texas manufacturing sector continued in September, though the pace slowed notably from August," Dallas Fed Senior Business Economist Emily Kerr said in remarks e-mailed to MT Newswires. "September marked the seventh consecutive month of production growth. Outlooks were stable."

Six months out, expectations for general business activity decreased to 8.4 this month from 24.8 in August, while the future production index moved down to 31.6 from 40.4. The forward-looking indicator for new orders and shipments also posted declines, the data showed.

Last week, S&P Global's ( SPGI ) flash purchasing managers' index showed US private-sector output growth hit a three-month low in September amid softening demand, though selling prices rose at the slowest pace since April.

Earlier this month, a New York Fed survey showed manufacturing activity in New York unexpectedly contracted in September as orders and shipments turned negative.

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