Texas Service Sector Outlook Survey

Historical data are available from January 2007 to the most current release month.

Historical data are available from January 2007 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.

†Added to survey in January 2018.

Data have been seasonally adjusted as necessary, with the exception of the outlook uncertainty index which does not yet have a sufficiently long time series to test for seasonality.

Texas Service Sector Outlook Survey

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Texas Retail Outlook Survey

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Texas Service Sector Outlook Survey

Comments from Survey Respondents

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

• We feel that the Fed [Federal Reserve] is finally working on inflation.

• Decreases in COVID cases bring more confidence.

• It's hard to predict when the impact from rising inflation will hit us. Parts’ prices are going up every time we order. We still have a lot of parts that are on back order due to supply-chain problems.

• Things seem to be pretty stable at the moment. Inflation continues to run hot, but no hotter than it's really been for the past six months or so. Our assumptions are that it stays that way for most of this year, so we continue to work within those constraints.

• Continued cost increases and multiple headwinds finding and keeping qualified/capable candidates at manageable costs [are occurring]. Uncertainties continue and affect timing to close new business.

• The ability to fill available positions (workforce availability), increasing wages/salaries, increasing SG&A [selling, general and administrative expenses] (business development costs such as entertainment and travel), and strong competition continuing to apply pressure on interest rate spreads and fees are all challenges.
• Rising interest rates will cause the economy to slow if the Federal Reserve raises interest rates too fast or too high. The root cause of inflation is the stimulus spending coupled with supply-chain issues. If and when these are solved, inflation will moderate.
• Rising inflation (wages/materials) combined with expected increases in interest costs are beginning to forecast slower growth in certain sectors.
• What are interest rates going to do? What will utilities cost? How much will our insurance policies rise in price? What will the prices of fuel, food and housing do to our staff? How does the economy manage falling expectations? Will we stumble into another war? Did anyone really think the money supply could explode without price increases? What happens to the Federal Reserve’s macroeconomic models when the microeconomics have changed substantially?
• The political environment is creating instability in the markets and the threat of more burden from more regulations. Inflation has resulted in increased cost for the consumer and perpetuates the frustration of people.

• Tough sales demand along with employee higher wages and raw material price increases make for a really tough time.

• Reduction in reported COVID cases seems to helping the general business sentiment. I hope we don't have a relapse.

• Due to continued inflation in part due to energy costs at all levels, the stock market, the international uncertainty with both Russia and China as they flex their muscles of aggression in defiance of the U.S. and the world community, informed individuals and business owners feel anxiety in making decisions.
• Increased uncertainty in the economic outlook is based on whether the Fed [Federal Reserve] will need to provoke a recession to slow inflation.
• We have concerns about higher interest rates and still-low inventory of houses.

• Generally the supply chain (in our case, heavy equipment from our manufacturers) has not improved. We are ordering for 2023 already and don't really know what we will get in 2022 or when we'll get it. That adds a certain amount of angst to guarding the assets of a 63-year-old family-owned company and the 630 employees that invest their careers and trust in us!

• We are off to a record start. Even retail is coming back for new development.
• Labor shortages are a huge impediment to sustained growth. Our workload has increased, but qualified staff are not available. We are forecasting growth, but we can't find the experienced people to work. We are paying more for less-qualified people. In the professional services industry, it is difficult to pass on wage and benefit increases to clients. It's a real problem.
• Bottom line, we are waiting and watching for now. There is a fair degree of uncertainty watching the Federal Reserve and their actions and also how the Russia/Ukraine situation plays out and further impacts markets and factors driving markets. We will need to see how Q1 develops and where we sit in Q2. Sentiment can definitely turn negative. With oil prices high as a result of geopolitical matters, this could help drive some business for us. Again, we will wait and watch. I will add we are bringing more folks back in as COVID concerns wane. We are reading about new omicron variants but are fatigued with it at this point and looking for some modified normalcy.
• The rise of the 10-year [Treasury] rate is a little concerning for the residential real estate market. Even though rates are still very low, we still have an inventory issue and have seen a slowdown in orders. We will have to see how this is going to affect the commercial market as it continues to rise.
• The ongoing threat of war and cost of goods is not a good indicator for current and future business.
• 2021 was an excellent year with increased demand and rates and we grew. 2022 is off to a good start with demand and new rates holding up well.
• We continue to add new clients and see increases in service opportunities.
• Wages and benefits are becoming cumbersome for a small business. The desperation of the larger companies is being seen by the high wages being offered to lower-qualified candidates and base-level administrators.
• Rising rates and higher-than-expected inflation are adding uncertainty.
• A great deal of our business (trials) was canceled in January, directly due to omicron and COVID concerns. They are starting up again now, so our outlook is brighter. January was much lower than we expected a few months prior.
• The outlook for all tax practitioners, including CPAs, should be improved if we choose to stay in the profession. There aren't enough of us to go around, and the burden Congress and the president (current and last) put on the IRS to deliver financial relief in the midst of an already insurmountable backlog has created problems for ordinary taxpayers that will not get resolved easily or quickly. Couple the very real danger of burnout with a moral obligation to avoid profiting off the misfortunes of others, and it is no wonder I am getting frequent solicitations of accounting practices for sale.
• Inflation is creating risks in terms of employee salary and retention.
• We are having difficulty hiring qualified applicants, even with increasing wages 25 percent plus benefits. Some long-term employees are changing jobs to reduce work hours. 

• The Fed [Federal Reserve] [interest] rate increase has folks worried. Unsure of why exactly, but uncertainty isn't great for my business. 

• Inflation, interest rates and international uncertainty are concerns.
• Increasing economic uncertainty, higher inflation and expected interest rate increases are beginning to impact M&A [mergers and acquisitions] activity outside of “hot” sectors.
• There are no applicants for job openings—absolutely none.

• Education (K–12) is responding to the damage education disruption has caused to student learning progression, student socialization and emotional states apparent in many returning students. Increased demand for teachers and teacher support staff nationwide, slowed college graduation rates and early teacher retirements reduce the pool of ready teacher candidates. Increased pay for the entire pool, supported by significant federal funding intended to attract more teachers to the profession, is dramatically inflating teacher salaries and reducing teacher workdays (now about 191 days/year in Texas). Increased immigration could help, but programs focused on promoting teaching to new college graduates or anyone with a four-year college degree would help more. In Texas, many starting salaries with no experience are $56,500 or more with qualifications of a four-year degree in any area. If a candidate has a four-year degree, they are qualified to teach; public charter schools and public school districts will provide significant support and training to ensure their success.
• Uncertainty has increased due to current negotiated rulemaking underway at the Department of Education and the potential impact to the cost increase associated with regulatory compliance.

• Our main uncertainties are supply-chain issues (No. 1) and staffing pay increases (No. 2).
• Endless debates of hikes range seven or four; spreads, futures, straddles and bond risks galore; capital markets inflicting pain; And now a big dose of Ukraine; forget the punditry, kudos to the Fed [Federal Reserve] team for their candor.

• Labor and supply costs are exploding with little clarity regarding future relief.

• We have seen an increase in sickness and [employee] time not at work.

• In the last two weeks, we have seen a very strong surge in reservations for 90+ days. We have also seen conventions start to materialize, which is creating compression in the market. While it is too soon to say this aloud, these next 90 days will be every bit as busy as we were in 2019.

• Supply-chain issues are still significant.
• January was challenging with COVID and weather issues, and February started the same way. We hired new staff in January and February and also lost the same amount of staff.
• Different month, same problems: Back to office and business travel is very slow and hurts businesses in or near downtowns. We are still turning away business because we can't adequately staff. Quality of staff available is far below our needs. Supply chain is not improving, with many critical shortages and prices for just about everything we purchase significantly increased with limited ability to pass along [cost] to customers. This is the most difficult environment of my nearly-40-year career.

• Lack of applicants is hurting our business. We are understaffed and are trying to hire new employees.

• Supply-chain disruptions increased in the fourth quarter and continued into January 2022.

• Supply-chain issues still dominate our resource planning. Suppliers are still short-filling orders (mainly poultry suppliers). Hiring truck drivers to move orders is challenging and more expensive. What used to take one or two phone calls now takes three or four.

• Supply-chain issues persist with no end in sight for the automobile business. We expected things to free up this spring but instead they have gotten worse.
• Back-order issues for vehicles and parts have again worsened this month after having improved during fourth quarter 2021 into January 2022. The shortage of semiconductor chips is the primary cause of the disruption.
• We are particularly concerned over increasing fuel prices and the effect a potential conflict in Ukraine could have regarding the rise in fuel prices.
• Our business model has become even more challenging. There are too many issues beyond our control. Inventory shortages of new and preowned vehicles and parts are all major concerns. Chip and components shortages have gotten worse, and we don't see significant improvement this year. Forecasting with accuracy is impossible. Unknown details from suppliers are creating communication issues and major service-related problems/delays. Consumer confidence, inflation, increase in interest rates, affordability, health care, benefits; the list goes on and on.

• Finding qualified employees is still difficult. We are still having supply-chain issues on certain building materials along with rising prices. If material is available, trucking and rail service are both taking longer, adding to the supply issues we’re having. There seems to be a shift in the wrong direction with employees’ attitudes because of inflation, which they feel at home, along with self-imposed stress at work due to issues with COVID and delays in taking care of the customer. Company leadership is critical during times like this. The greatest asset any company can have is its employees, and they need to know that.
• We see a slight increase in employees, wages and sales, but it is not significant.

Historical Data

Historical data can be downloaded dating back to January 2007.

Indexes

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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.