Texas Manufacturing Outlook Survey

Results summary

Historical data are available from June 2004 to the most current release month.

*Shown is the number of consecutive months of expansion or contraction in the underlying indicator. Expansion is indicated by a positive index reading and denoted by a (+) in the table. Contraction is indicated by a negative index reading and denoted by a (–) in the table.

**Shown is the number of consecutive months of improvement or worsening in the underlying indicator. Improvement is indicated by a positive index reading and denoted by a (+) in the table. Worsening is indicated by a negative index reading and denoted by a (–) in the table.

Data have been seasonally adjusted as necessary.

Production index

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Comments from survey respondents

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

• We continue to struggle to find qualified manufacturing employees. We are investing heavily in automation to increase productivity and allow us to meet demand without adding head count. This also allows us to pay more to the people we have, which should help us retain skilled people.
• We are closely monitoring the banking meltdown with customers and suppliers. There has been minimal impact so far.
• We expected things to cyclically slow, and all markets are correcting except auto. We expect once inventories reduce from elevated levels, we will begin to ship closer to end demand, likely mid-to-late second half 2023.
• [The collapse of] Silicon Valley Bank could be the beginning of more challenges ahead.
• We are seeing steady growth in our services business while at the same time phasing out older hardware-based sales. We are considering outsourcing our warehouse and fulfillment services.

• Activity has picked up. We are cautiously optimistic regarding activity this year. Downward risk factors (inflation, workforce, and global security threats) are still more significant than the potential economic tailwinds.

• Margins are better than they have been since COVID began. Business is good right now.
• Illiquidity of consumer customers is increasing. Stagflation is upon us. The politically charged funny money, the denial of economic realities by the current administration and the illusion of prosperity have come home.

• The current market upheaval with bank failures and inflation is still above acceptable levels and the main driver of my thoughts. How this is handled in the near term will impact the future exponentially. Higher interest rates could mean more bank failures. The government cannot insure all deposits in all the banks. I do not see any price pressure on raw materials in the near term. Labor is still a problem; finding and retaining good employees is challenging.

• We are holding steady at current revenue; however, there are many uncertainties that are causing us to be extremely cautious.
• We have seen our business improve substantially, but others not so much. We’ve vertically integrated our business, which has improved profitability and delivery time greatly. Even our competitors are buying from us now. We are spending heavily to bring our production in-house, which directly hurts our current suppliers but has substantially reduced our costs and delivery time, thus increasing our customers’ satisfaction.
• Our outlook is horrible. The level of certainty is zero. Production is hand to mouth. We cannot find workers.

• We are laying off workers for the first time since 2010.

• The supply chain is still a huge concern. Raw materials are steadily increasing in cost and getting harder to locate in some instances.

• Business is slowing down. Mexican imports are increasing. We can no longer sell all of our capacity. Requests for quotations for curtain walls for office buildings are drying up for 2024. We actually expect that part of our business will slow down in the third and fourth quarters.
• Foreign competition is at an all-time record percentage for our segment of the industry. Several countries, including Mexico, are subsidizing manufacturers in our industry. Our industry association is looking into antidumping charges on several countries that are known to subsidize their manufacturing plants exporting to the U.S. On a positive note, there was a recent customs ruling that any product containing Russian-sourced aluminum will be subject to a 200 percent tariff. A declaration of country of origin for aluminum will be required for imports of aluminum products. Several of the countries subsidizing our competitors are also using Russian-sourced aluminum. This ruling should help somewhat to fight the unfair trade practices.

• We continue to see new orders coming in, sustaining the price increase we implemented due to increased labor and material costs. We hope this holds up but are worried that the slowdown we are seeing may create competitive pressures on maintaining price margins. It is still very tough to find employees wanting or willing to work. Perhaps we need to loosen up on immigration restrictions to help with this shortage of laborers.

• There are too many negatives in the economy: International conflict, inflation, poor national leadership, deficit spending, the Federal Reserve keeping rates artificially low and now raising them quickly and steeply, thus stressing the financial markets.

Historical Data

Historical data can be downloaded dating back to June 2004.

Indexes

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

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.