03:48 PM EDT, 07/28/2025 (MT Newswires) -- Texas manufacturing activity unexpectedly swung into growth territory in July after five months of contraction, while the outlook improved, data from the Federal Reserve Bank of Dallas showed Monday.

The general business activity index rose to 0.9 this month from minus 12.7 in June. The consensus was for a minus 9.5 reading in a survey compiled by Bloomberg.

Production, which the Fed branch calls a key measure of state manufacturing conditions, jumped 20 points to 21.3, the highest since December 2021. New orders improved to minus 3.6 from minus 7.3, while the shipments index rose to 2.7 from minus 7.3.

"Some weakness persists, particularly in the volume of new orders, but several survey indicators turned positive after a string of negative readings," Emily Kerr, senior business economist at the Dallas Fed, said in remarks e-mailed to MT Newswires. "Employment growth continued to pick up, and outlooks improved. Raw materials price pressures remain elevated, and numerous manufacturers expressed concern over tariffs and the surrounding uncertainty."

The employment index moved up to 8.4 this month from 5.7 in June. Prices paid for raw materials slipped to 41.7 from 43, while prices received for finished goods declined to 11.1 from 26.1.

Labor market measures indicated an increase in employment, the Fed branch said.

Six months out, expectations for general business activity rose to 19 in July from last month's 14.4, while the future production index climbed to 30.3 from 22.6, according to the Fed branch's report.

Last week, the Kansas City Fed's survey showed manufacturing activity in the US Midwest region surprisingly moved into expansion territory this month amid a rise in new orders.

Also last week, S&P Global ( SPGI ) data showed that US private-sector output growth reached a seven-month high in July as strength in the services sector helped offset weakness in manufacturing.

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