Dallas – Texas manufacturing activity surged in September, according to the Federal Reserve Bank of Dallas, while employers continue to report a shortage of qualified applicants. Governor Greg Abbott met Thursday with the Texas Jobs Council to discuss how the state can expand training pipelines for high‑demand occupations.
Strong factory performance
The Dallas Fed’s Texas Manufacturing Outlook Survey showed the production index jump 13.4 points to 29.5 in September, indicating a robust pace of output expansion. New‑orders, shipments and capacity‑utilization indexes also rose, reaching 30.7, 24.8 and 23.9 respectively. Employment improved as well, with the manufacturing employment index climbing from 8.0 in August to 15.1 in September.
In the survey, 41.5% of responding manufacturers reported increased production, while only 12% saw a decline. About 26.5% said employment grew, compared with 11.4% that reported a decrease.
Labor market challenges persist
Despite the upbeat manufacturing data, a July Texas Business Outlook Survey revealed that 51.5% of businesses were actively trying to hire. Among those, 47.5% cited a lack of available applicants as the primary obstacle, and 46.7% said candidates were demanding higher pay than employers were prepared to offer. Additionally, 39.3% pointed to a shortage of technical or hard skills, and 35.2% noted insufficient experience.
Governor Abbott’s response
At the Texas Jobs Council meeting, Governor Abbott proclaimed October 2‑9 as Manufacturing Week in Texas and emphasized the need for a larger pipeline of skilled workers. He highlighted demand for electricians, pipe fitters, welders, plumbers and truckers, urging the council to develop clearer pathways into these trades.
The council, created in March, is tasked with drafting legislative and executive recommendations ahead of the 90th Texas Legislature. Early proposals include exposing students to career training earlier, strengthening workforce readiness programs, and creating clearer certification routes for high‑demand occupations.
Technology reshaping the labor picture
A Dallas Fed analysis of online job postings found early evidence that generative artificial intelligence is reducing demand for occupations that can be automated. Two‑thirds of Texas firms surveyed in May reported using AI, up from 40% two years earlier, signaling a shift in the types of skills employers will need.
Economic outlook
The Dallas Fed projects Texas employment to grow 1.2% in 2026, adding roughly 173,600 jobs and bringing total employment to about 14.5 million by December. August saw an addition of approximately 18,500 jobs across sectors such as professional services, construction, government, manufacturing and hospitality.
Manufacturers remain optimistic: 48.8% expect production to increase over the next six months, while only 8.5% anticipate a decline. However, input‑price pressures are rising, with the raw‑materials price index climbing to 52.2 and the wages‑and‑benefits index to 27.4.
What’s next?
The Texas Jobs Council will finalize its recommendations before the next legislative session, aiming to align workforce development with the state’s rapid industrial growth. Whether Texas can train enough skilled workers to meet employer demand will be a key factor in sustaining the manufacturing momentum.
Original reporting: The Dallas Express — read the source article.
