Research & Data

Texas Manufacturing Outlook Survey

Special Questions

October 28, 2013

1. How do borrowing conditions facing your firm compare to those six months ago?
    Oct '11
Oct '12
Oct '13
  Eased substantially 1.4 0.0 0.0
  Eased somewhat 11.0 3.9 6.9
  No change 39.7 53.2 51.4
  Tightened somewhat 13.7 9.1 13.9
  Tightened substantially 6.8 2.6 1.4
  Not applicable–haven’t sought credit 27.4 31.2 26.4

2. How does the cost of credit compare to what it was six months ago?*
        Oct '13
  Eased substantially     4.2
  Eased somewhat     31.9
  No change     31.9
  Tightened somewhat     2.8
  Tightened substantially     0.0
  Not applicable–haven’t sought credit     29.2

3. To what extent is your business having difficulty obtaining financing for desired long-term uses such as capital expenditures?
    Oct '11
Oct '12
Oct '13
  No difficulty 34.2 41.6 48.6
  Some difficulty 17.8 9.1 13.9
  Substantial difficulty 8.2 9.1 1.4
  Extreme difficulty 2.7 3.9 4.2
  Not applicable–haven’t sought credit 37.0 36.4 31.9

4. To what extent is your business having difficulty obtaining financing for desired short-term uses such as paying workers and acquiring inventories of material or supplies?
    Oct '11
Oct '12
Oct '13
  No difficulty 35.6 42.7 50.0
  Some difficulty 9.6 8.0 9.7
  Substantial difficulty 5.5 5.3 2.8
  Extreme difficulty 4.1 2.7 1.4
  Not applicable–haven’t sought credit 45.2 41.3 36.1

5. Has your firm’s production and/or sales been adversely affected by difficulty obtaining credit?
    Oct '11
Oct '12
Oct '13
  Yes–significantly 5.5 3.9 1.4
  Yes–somewhat 13.7 9.1 6.9
  No 31.5 27.3 36.1
  Not applicable–haven’t had problems obtaining credit 15.1 19.5 20.8
  Not applicable–haven’t sought credit 34.2 40.3 34.7

6. Has your firm reduced hiring and/or increased layoffs due to difficulty obtaining credit?
    Oct '11
Oct '12
Oct '13
  Yes–significantly 2.7 3.9 0.0
  Yes–somewhat 13.7 6.5 11.1
  No 32.9 32.5 34.7
  Not applicable–haven’t had problems obtaining credit 16.4 20.8 19.4
  Not applicable–haven’t sought credit 34.2 36.4 34.7

*Question added in 2013.
Survey collection period: 10/8/2013 to 10/11/2013

Special Questions Comments

These comments have been edited for publication.

Paper Manufacturing

  • We are lucky in that we are cash strong and don't foresee needing to borrow anytime in the near future.

Chemical Manufacturing

  • The future of health care issue is a larger influence on the business and hiring than credit availability.
  • We are in a good position as two or three large banks have vied for our business. In discussions with the banks, they have stated the difficulty they are having in finding quality loans to make. We have squeezed the banks quite hard and probably have reached a bottom in floating rates over Libor.
  • The Fed needs to induce banks to make lending to small businesses much easier. It is almost impossible to obtain credit from banks; we must go to alternate sources and pay much higher interest rates.

Plastics and Rubber Products Manufacturing

  • The interest rate is up slightly and more collateral is required, but we're able to use our credit line or borrow when needed.

Nonmetallic Mineral Product Manufacturing

  • Health care costs and uncertainty over them are a deterrent to hiring.

Primary Metal Manufacturing

  • We are still in a strong financial position and have not experienced a loss month since 2010, despite a downturn this year. The company is debt free and continues to plan for manufacturing expansions in 2014.
  • We have a very strong balance sheet and very strong ownership, financially speaking.

Fabricated Metal Product Manufacturing

  • There are two important considerations not captured by your questions. First, we were able to materially reduce our interest cost on a term loan B in June 2013 versus June 2012. Finance costs have ticked up moderately since June 2013. Second, the small contractors that install our products have not had adequate access to working capital. That has required manufacturers to step in to fill the void created by regional banks absence from nonresidential construction contractors’ credit.
  • We are a publicly held multinational company. We are in a strong financial position with large cash reserves, especially overseas. Obtaining credit both privately and publicly has continually gotten easier over the last three years.
  • Although we have been able to obtain additional credit, the owners' personal risk, pledged collateral, higher interest costs and guarantees have increased. This has all been done with some optimism of improved business conditions that have been slow to develop.

Machinery Manufacturing

  • Credit from our bank is readily available as long as our financial performance is positive.

Computer and Electronic Product Manufacturing

  • We rolled $1 billion in debt this past May, half at five years, the other half at 10 years. We have debt due almost every year for the next 10 years and plan to roll over as long as interest rates remain low. Balances due each year are about 10 to 25 percent of free cash flow, so rollover risk is low and won't be impactful to operations if we need to pay them off.
  • Business has slowed a lot!

Food Manufacturing

  • Credit is not the problem. The Affordable Care Act—now that's a problem. It doesn't matter what interest rates are.


Questions regarding the Texas Manufacturing Outlook Survey can be addressed to Emily Kerr at

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