Texas Service Sector Outlook Survey

Report in PDF

April 30, 2013

Texas Service Sector Activity Expands but at a Slower Pace

Texas Retail Outlook Survey

April 30, 2013 

Retail Sales Fall

Retail Sales Fall

Next release: May 29, 2013

Texas Service Sector Outlook Survey

April 30, 2013

*Indicator direction refers to this month's index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.
**Number of months moving in current direction.
Data have been seasonally adjusted as necessary.

Texas Retail Outlook Survey

April 30, 2013

*Indicator direction refers to this month's index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.
**Number of months moving in current direction.
Data have been seasonally adjusted as necessary.

Texas Service Sector Outlook Survey

April 30, 2013

Downloadable TSSOS chart: Low-res (72 dpi) | Hi-res (300 dpi)

Texas Retail Outlook Survey

April 30, 2013

Downloadable TROS chart: Low-res (72 dpi) | Hi-res (300 dpi)

Texas Service Sector Outlook Survey

April 30, 2013

Comments from Survey Respondents

These comments are from respondents' completed surveys and have been edited for publication.

Rental and Leasing Services

• The only reason we forecast good growth over next six months is because we are looking at a major acquisition of a bankrupt company. This company filing for bankruptcy is probably more indicative of the economy than the fact that we are growing through an acquisition. We are expanding because we want to pass our family-owned company on to the third generation.

Professional, Scientific, and Technical Services

• The real estate industry has continued to improve throughout the first quarter of 2013, with the residential sector still leading the way. The increase in demand for houses coupled with a shortage of inventory has increased prices and the number of transactions closed over the first quarter of 2012. The commercial sector still seems to be recovering from the brisk fourth quarter of 2012, but new orders for commercial transactions have been increasing steadily during the month of April. Our outlook for the remainder of 2013 remains positive, but we are cautious about adding staff due to the state of our economy.

• A serious concern for businesses is the federal government debt.

• Taxes and health care costs are major concerns for us, while our clients face much uncertainty.

• Employment will be up slightly due to a contingent of summer interns and a few full-time additions. We think the cost of doing business and our cost per employee will increase toward the end of the year as costs associated with the Affordable Care Act become clear. We have no faith in the numbers we have been hearing from the federal government. We are being extremely cautious about adding full-time employees.

• We feel the economy remains somewhat stable but still erratic.

Management of Companies and Enterprises

• Too much regulation is hurting us and our customers.

• The increased cost of regulations has affected our business and ability to deliver products.

• As a community bank, we have seen our interest income squeezed as net interest margins contract due to the low interest rate environment and the intense competition for loans as more banks try to grow their loan portfolios.

• We feel that federal regulations are the single greatest obstacle for recovery.

Administrative and Support Services

• We are seeing several months of reduced job openings and longer decision times for hiring.

• We are introducing a new product that we expect will increase our market share.

• Although we will continue to expand our services and products, the pressure to maintain competitive prices does not allow us to pass along all of our increased costs. This does put pressure on our margins and requires greater efficiency in producing sales. We expect this pressure to continue throughout 2013.

Ambulatory Health Care Services

• We are located in the Permian Basin, and the oil production boom is at a high in this region. That does not impact health care providers but may have contributed to the increase in our labor costs. Health care providers are dealing with a continuous lowering of payments from Medicare, Medicaid and private insurance payers, who are tying payments to timely claim filing, quality assurance and outcomes. Overall, we believe health care reform is needed and will bring a high volume of first-time patients to health care providers who will have to manage this population at a much lower cost while dealing with increasing accountability for quality of service and patient outcomes.

• We believe the local economy is faring well, but consumers are cautious. We do a significant amount of elective surgeries, and we expect at least a portion of those to be delayed. The sequester is affecting our Medicare payments, which will be 2 percent less. Another potential hit to the local economy is drought, with agriculture a very big portion of the Panhandle economy.

Hospitals

• We have not had a raise in a few years and don't really look for one in the near future.

Nursing and Residential Care Facilities

• Sequestration has reduced our Medicare revenue by 2 percent across the board. This is having a major impact on our revenues and services.

• Our outlook is negative due to lower government reimbursement and continuing uncertainty about the impact of the late 2012 health care reform.

Accommodation

• Weekend business is a little weaker than in prior months. We have a solid core of long-term employees who are good drivers of bringing in business. We are in a very competitive marketplace.

• We remain a bit concerned about the third and fourth quarters of this year.

Food Services and Drinking Places

• While we are indicating that everything remained the same in revenue, this is actually an improvement because we had been looking at declining sales since the first of the year. Our numbers definitely indicate that the economy is recovering from the shock of the payroll tax increase. We haven't made it back to the slightly positive numbers we had in the last part of 2012, but we are now at least even with last year again.

Insurance Carriers and Related Activities

• We are seeing increasing payroll and sales figures in commercial insurance applications, especially from contracting risks.

Merchant Wholesalers, Durable Goods

• We think a mild recession is coming between the end of 2012 and the first half of 2014. Our outlook is biased by that expectation. However, we will drive as much volume as possible through year-end until it starts falling off. Texas should be pretty mild, so we believe it will be better to stay aggressive all the way through the dip.

• There are extreme dry weather conditions in agriculture markets.

• This is our first negative report about the next six months. We are seeing a noticeable caution about the economy this month; one of our better customers reports that while they've been awarded jobs, more of these projects are being held indefinitely, like they had first experienced a few years ago. The more they learn about the new health care law, the more they are concerned about their costs and the economy. They believe their contractor and developer customers are starting to get nervous, and we agree.

Merchant Wholesalers, Nondurable Goods

• We are still experiencing an incredibly tepid demand cycle. An influx of low-cost imported products is now creeping into our marketplace, at a pace we have not seen before. We may have to switch more of our business to lower-cost imported products to continue to compete.

Motor Vehicle and Parts Dealers

• Our problems are related to our franchisor, not the market, which is up.

Building Material and Garden Equipment Supplies Dealers

• Business is better, but the underlying current is still uncertainty. It seems that pent-up demand took over for now.

Nonstore Retailers

• We are anticipating sales growth primarily due to adding a new line of business. We expect our core original lines of business to remain flat. We are increasing our pricing on original lines of business to maintain margins in the face of price increases from our suppliers. In vending, it takes time to raise prices on thousands of machines; thus, we attempt to get ahead of expected price increases.

Texas Service Sector Outlook Survey

Historical Data

Historical data can be downloaded dating back to January 2007.

Indexes

Download indexes for all indicators. For the definitions of all variables, see Data Definitions.

Texas Service Sector Outlook Survey			Texas Retail Outlook Survey
Unadjusted			Unadjusted
Seasonally adjusted			Seasonally adjusted

All Data

Download indexes and components of the indexes (percentage of respondents reporting increase, decrease, or no change). For the definitions of all variables, see Data Definitions.

Texas Service Sector Outlook Survey			Texas Retail Outlook Survey
Unadjusted			Unadjusted
Seasonally adjusted			Seasonally adjusted