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 economy is improving.

• We are facing supply-chain issues and inflation.

• Our outlook continues to be very uncertain, and as long as domestic and foreign economic variables continue to be uncertain, the outlook for our industry will continue to be uncertain as well.

• We are moderately optimistic about the overall business outlook. We will likely take a PPI- [producer price index] based price increase at the beginning of the year, and we believe that inflation has peaked, so we will hopefully pay slightly less for inputs next year compared to what we paid in 2022. In addition, demand for American energy remains as strong as we've seen, so we continue to be encouraged about prospects moving forward.

• Our situation is very similar to last month [in regard to] inputs. But, Europe and parts of Asia are seeing even more risks.

• We are experiencing higher-than-expected loan losses in our subprime unsecured consumer loan portfolio.
• Agriculture is currently at greatest risk considering the impact of the drought. Activity has picked up in livestock sales because of widespread liquidation of livestock. The beef inventory is down, and we expect inventories for the next several years to be further reduced due to lack of replacement breeding livestock. Farm production has been severely reduced, with most producers in our markets collecting only from insurance claims. Input costs were substantially reduced, with all producers having minimal investment in a crop that was not going to be harvested. Inflation seems to be affecting most people and businesses. The shortage of people willing and available to work has certainly been evident with local businesses closing periodically for a lack of help.
• Inflation and interest rate increases appear to be having the intended effects of slowing down growth in expansion in real estate-related projects (homebuilding, development, etc.).

• M&A [mergers and acquisitions] activity has slowed over the past few weeks. We expect weakness to continue. Chapter 11 [bankruptcies] is creeping into the narrative causing risk concerns.

• We continue to wonder if Washington lawmakers are trying to help us or hurt us.

• While changing business conditions are creating challenges for some, we are finding those same challenges are creating new opportunities for us and our B2B [business to business] services. When the going gets tough, experience is more valued.
• Increasing interest rates and capital costs are crushing margins. Revenue, though increasing, is not at the same pace as expenses.
• Every newspaper, magazine and the internet is reporting "home sales falling." The stock market is down, interest rates high, inflation! The media loves to send out bad news, causing many buyers to be scared to invest or buy properties. When I got into selling real estate, the interest rates were 17 percent; 5 percent is low!
• Interest rates are rising, and clients are securing/willing to secure lending at higher-than-budgeted rates.

• Anyone who is confident in the leadership of this country today lives in a fantasy land. The lack of confidence in the ability, knowledge, fortitude, intelligence, values and morals of this country's leadership cannot instill any confidence in the direction this country is headed! And I apologize but I include the Federal Reserve in that condemnation too. I believe they are all academicians who have never been responsible for a payroll, a P&L [profit and loss situation] or a private sector business.

• Our community is somewhat optimistic about the future with respect to the growing opportunities in technology fields: smallsats [small spacecraft], AI [artificial intelligence] and climate. The lingering concern for small and medium businesses is the cost of capital for growth, technology investment and the continuing competition for talent to remain competitive.
• In general, staff productivity is down. We are still having difficulty picking up the pace to prepandemic levels. [We are] seeing many more requests for time off and interruptions to deal with personal, family or child care problems.
• Things continue to "chug" along. There have been no significant changes other than hassles over inflation, which seems to be slowing down.
• Interest rates coupled with a shortage of both concrete and workers are slowing construction rates and the ability to finish projects.
• The recession is starting to hurt grocery purchases and, thus, grocery marketing spend.
• It looks like the increase in [interest] rates over the past few months has done exactly what the Federal Reserve intended it to do. Residential home sales have slowed, prices are coming down, and the commercial market is following suit. The word on the street is the commercial market will be slow for a couple of months due to interest rate volatility and sellers determining how to value their assets. This process coupled with getting inflation under control will determine how long it will take to return to a healthy market.
• Business is still progressing despite inflation.
• We are still having a hard time finding candidates for recruitment, especially at the operational level.

• Labor, labor, labor. We cannot find any new hires.
• Finding, training and retaining staff is top of mind and the key impediment to growth.
• Inflation is higher than the official figures, and none of the experts can agree on the direction of the economy. Times are very uncertain, and that makes long-term planning more difficult.
• Costs continue to rise faster than we can increase retail pricing and be competitive. We are just big enough to be subject to "large" company rules, but our revenue is not high enough to support all of the fed [federal government] requirements.
• Inflation continues to be our major concern.

• Inflation is still a major stumbling block in the economy. Please don't ease up on rates until inflation is well under control.
• We need public support and reinforcement that teaching is a positive field to enter as a life’s work.

• The academics espouse balance between supply/demand;
  Slow the economy the pundits and investors doth command;
  Fed [Federal Reserve Board] governors fairly split;
  Not so easy they admit;
  Capital destruction everywhere; almost feels like quicksand.
• We face continued challenges to hire new people. Wage inflation continues to prevent additional employee departures.

• Business levels are about where we anticipated. Nothing significantly has impacted the revenue side. Staffing in an urban area continues to be challenging. We typically staff for 340–350 FTEs [full-time equivalents] and we have 300 FTEs, short roughly 50 staff members. It is especially difficult in F&B [food and beverage] positions.

• We are concerned about rising labor costs and declining productivity in spite of increased pay. Business travel remains low as is activity from downtown, which was a major source of revenue. Rising costs of product and supplies will not abate. What will the effect of inflation/slowdown be on the economy? We are concerned we could experience the late 70s to early 80s again. That would be difficult to survive after the COVID lockdown disaster.
• The big swings have slowed down. In the first quarter, we saw more growth; it carried into second quarter, but since June, sales have plateaued. I am expecting with school back in session that sales will increase given less travel. But we will have to wait and see; thus far, no major changes in August. Are we beginning to feel the talked-about recession? Hard to tell—hope not.
• Although prices continue to rise, there appears to be some tapering off in the increases. Some individuals are returning to the workforce because their kids are back in school, and with inflation weighing heavy, they need to return to work.  

• Capital expenditures are increasing as the company is adding new locations.

• A lot of uncertainty exists about future business conditions in the service sector. Will travel and entertainment spending begin to decline in the near term due to the impact of inflation and as lower- and middle-income consumers begin to feel the impact of food and transportation costs increasing?

• Rising input costs are finally causing my customers to push back. I am surprised it took 12 months of rising prices to reach this point.

• There is a tremendous economic slowdown and also a substantial cost increase from inventory to people looking to get paid a lot more. Customers are very cautious and not looking to spend money.
• There is a difference between how we feel about the industry and what we present to our employees. We don't want to will ourselves into lowered sales levels. Business continues to remain pretty good, although the number of preorders that we have queued up is down about 25 percent from its peak and will continue in that direction as inventories in the field continue to build and there is more competition for the consumer. I feel like our business will decline a little bit over the next six months just as the lower-wage workers tighten up, but I feel like we'll see additional margin pressures as we go from a shortage of inventory to more-normalized levels.
• As availability of new vehicles increases, sales prices will decline. We expect a slow increase in new-vehicle availability over the next 12 months.
• There is a general softening in our sales activity. Used-vehicle pricing is pressured from slowing demand and "pushback" on the high pricing. Our service business continues to see robust growth from customers keeping and repairing their vehicles rather than trading.

• Inflation is worrisome because we don't know how much to increase employee compensation.

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.