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Special Questions

Special Questions

July 27, 2020

For this month’s survey, Texas business executives were asked supplemental questions on the impacts of COVID-19. Results below include responses from participants of all three surveys: Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey.

Report in PDF

Texas Business Outlook Surveys

Data were collected July 14–22, and 396 Texas business executives responded to the surveys.

How do your firm’s current revenues compare with a typical July? For example, if revenues are down 20 percent from normal, enter 80 percent. If revenues are up 20 percent, enter 120 percent.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 74.2 68.1
Entries of exactly 100 10.3 100.0
Entries greater than 100 15.5 145.4
All entries 100.0 83.4

NOTES: 380 responses. This same question was posed in May and June.

What are the primary factors restraining your firm’s revenues? Please select up to three.

    Response
(percent)
Weak demand 65.4
Limited operating capacity due to staffing shortages (COVID-19 infections and quarantining, absenteeism, difficulty hiring, etc.) 24.4
Limited operating capacity due to state/local restrictions 23.5
Supply chain disruptions 19.3
Reduced productivity due to alternative work arrangements 16.9
Other 18.4

NOTES: 332 responses. Twelve percent of total respondents marked "Not applicable, revenues are not being restrained." This group was excluded from the calculated results for this question. The most common "other" factors specified were general disruption from the pandemic, clients' ability to pay and low oil prices.

How does your firm's current employee head count compare with February (pre-COVID)? For example, if head count is down 20 percent from February, enter 80 percent. If head count is up 20 percent, enter 120 percent. Please exclude any changes due to typical seasonality.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 51.2 70.8
Entries of exactly 100 34.8 100.0
Entries greater than 100 14.0 140.6
All entries 100.0 90.7

NOTES: 371 responses. This same question was posed in June.

Has your firm taken any of the following steps over the past month in response to the recent rise in COVID-19 infections in Texas? Please select all that apply.

    Response
(percent)
Increased spending on health and safety equipment at facility 62.1
Decreased number of employees working on-site 46.1
Postponed efforts to bring telecommuting workers back on-site 37.4
Reduced customer capacity at business location(s) 26.3
Partially shut down business operations temporarily 24.7
Postponed plans for recalling furloughed workers or new hiring 13.7
Laid off or furloughed workers 13.4
Fully shut down business operations temporarily 3.1
Partially shut down business operations permanently 2.3
Fully shut down business operations permanently 0.5
None 12.4

NOTE: 388 responses.

What are the primary logistical challenges to operating your business currently? Please select up to three.

    Response
(percent)
Managing employee COVID-19 screening and quarantine/sick leave rules 43.9
Maintaining health protocols at facility (disinfecting surfaces, configuring workspace and/or customer seating arrangements with six feet of separation, etc.) 40.1
Enforcing health protocols among employees (social distancing, hand hygiene, etc.)  39.0
Scheduling and maintaining sufficient staffing levels 32.7
Enforcing face covering and social distancing rules for customers 25.9
Understanding guidelines from state/local officials 22.9
Other 12.8

NOTES: 367 responses. The most common "other" challenges specified were employee productivity and lack of face-to-face interaction and networking.

Given your current outlook, how likely is it that your business will permanently shut down within the next 12 months?

    Response
(percent)
Not likely 91.2
Somewhat likely 5.7
Very likely 3.1

NOTE: 388 responses.

Survey respondents were given the opportunity to provide comments. These comments can be found on the individual survey Special Questions results pages, accessible by the tabs above.

Texas Manufacturing Outlook Survey

Data were collected July 14–22, and 107 Texas manufacturers responded to the survey.

How do your firm’s current revenues compare with a typical July? For example, if revenues are down 20 percent from normal, enter 80 percent. If revenues are up 20 percent, enter 120 percent.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 73.8 66.9
Entries of exactly 100 6.8 100.0
Entries greater than 100 19.4 129.7
All entries 100.0 81.3

NOTES: 103 responses. This same question was posed in May and June.

What are the primary factors restraining your firm’s revenues? Please select up to three.

    Response
(percent)
Weak demand 72.8
Limited operating capacity due to staffing shortages (COVID-19 infections and quarantining, absenteeism, difficulty hiring, etc.) 34.8
Supply chain disruptions 28.3
Reduced productivity due to alternative work arrangements 12.0
Limited operating capacity due to state/local restrictions 4.3
Other 9.8

NOTES: 92 responses. Eleven percent of total respondents marked "Not applicable, revenues are not being restrained." This group was excluded from the calculated results for this question.

How does your firm's current employee head count compare with February (pre-COVID)? For example, if head count is down 20 percent from February, enter 80 percent. If head count is up 20 percent, enter 120 percent. Please exclude any changes due to typical seasonality.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 52.5 73.7
Entries of exactly 100 26.3 100.0
Entries greater than 100 21.2 173.3
All entries 100.0 101.7

NOTES: 99 responses. This same question was posed in June.

Has your firm taken any of the following steps over the past month in response to the recent rise in COVID-19 infections in Texas? Please select all that apply.

    Response
(percent)
Increased spending on health and safety equipment at facility 71.4
Postponed efforts to bring telecommuting workers back on-site 40.0
Decreased number of employees working on-site 38.1
Partially shut down business operations temporarily 23.8
Reduced customer capacity at business location(s) 16.2
Postponed plans for recalling furloughed workers or new hiring 12.4
Laid off or furloughed workers 11.4
Partially shut down business operations permanently 1.0
Fully shut down business operations temporarily 0.0
Fully shut down business operations permanently 0.0
None 12.4

NOTE: 105 responses.

What are the primary logistical challenges to operating your business currently? Please select up to three.

    Response
(percent)
Managing employee COVID-19 screening and quarantine/sick leave rules 61.0
Enforcing health protocols among employees (social distancing, hand hygiene, etc.)  47.0
Scheduling and maintaining sufficient staffing levels 42.0
Maintaining health protocols at facility (disinfecting surfaces, configuring workspace and/or customer seating arrangements with six feet of separation, etc.) 42.0
Understanding guidelines from state/local officials 17.0
Enforcing face covering and social distancing rules for customers 15.0
Other 8.0

NOTE: 100 responses.

Given your current outlook, how likely is it that your business will permanently shut down within the next 12 months?

    Response
(percent)
Not likely 94.3
Somewhat likely 3.8
Very likely 1.9

NOTE: 105 responses.

Special Questions Comments

These comments have been edited for publication.

Chemical Manufacturing

  • We are managing the COVID issues well, but it is a lot of hard work by on-site medical staff and leadership in general.
  • Administering COVID issues takes significant management time. Employees are still paid when told to quarantine. We’re working shifts at 50 percent staffing but paying all employees fully.

Plastics and Rubber Product Manufacturing

  • Our COVID protocol started in March, and our people have been resilient since day one (no enforcement, just reinforcement).

Primary Metal Manufacturing

  • Potential employees can make close to what we pay by staying on government subsidies.

Fabricated Metal Manufacturing

  • We are dependent on bank financing renewal and obtaining consistent, profitable business to at least maintain break-even operations. It would be extremely helpful to receive/qualify for a second Small Business Administration PPP [Paycheck Protection Program] loan that could be all or partially forgiven. We have used our first PPP loan to keep all employees on a 40-hour week.

Machinery Manufacturing

  • Our competition is having a more difficult time than we are. We expect that they will go out of business because they did not diversify their business like we did years ago. Financially we are stronger and well managed for times like this and have stress tested our company every year for situations like today. We expect that COVID-19 will be around for another 12 months at a minimum.
  • The overreaction to COVID is worse than the virus itself. It is needlessly destroying many businesses.
  • I am extremely upset over government overreach and overreaction to a stupid virus, especially the Texas government. Never in my wildest dreams did I ever expect Texas to throw out common sense and try to enforce unconstitutional edicts by a governor bypassing duly elected people’s representatives. I pray every day our nation will return to some level of sanity and that God will intervene on behalf of working Americans to restore the right not only to work but to provide for families across this republic. We are in major trouble.

Computer and Electronic Product Manufacturing

  • We are currently operating at a survivable rate. With the help of the PPP loan, our cash flow is sufficient to weather the current revenue shortfalls on our system sales business. As our recurring revenues increase, we will become less reliant on system sales.
  • There has been enough time for the scientific research to finally come up with some real figures here comparing before and after COVID. How many people die from other diseases or preexisting conditions that are currently being blamed on and named COVID? How many people would die anyway from other diseases in comparison to the numbers we are seeing? Where are we really on prevention vaccines and treatment of this disease? We can’t continue to shut down businesses and have high unemployment for much longer. Business are shutting down already. This is a disaster that needs to be resolved. Stop the politics.

Transportation Equipment Manufacturing

  • An uncontrollable renewed outbreak of the virus in our area would have serious consequences, as it would if the virus impacted our supply chain.

Food Manufacturing

  • Ours is a unique hybrid of net-operating-income-driven humanitarian relief. We have no desire for growth, and we distribute via partnerships. I call it a war. We deal with fear, uncertainty, doubt and the fog of war by constantly working on critical thinking skills and the ability to adapt using emotional intelligence and a high level of equipment and staff management.

Wood Product Manufacturing

  • We have a number of COVID-positive employees, and that has affected some of our operations. People have to do additional work and work overtime and on weekends to get all the orders delivered.

Printing and Related Support Activities

  • Employee support for PPE [personal protective equipment]-wearing is good. Management must constantly enforce it, but employee support is not an issue.

Furniture and Related Product Manufacturers

  • We are struggling to find help even with the high unemployment rates. With the excessively high unemployment benefits being given, many people appear to prefer to collect unemployment than work for $10–12 an hour.

 

Texas Service Sector Outlook Survey

Data were collected July 14–22, and 289 Texas business executives responded to the survey.

How do your firm’s current revenues compare with a typical July? For example, if revenues are down 20 percent from normal, enter 80 percent. If revenues are up 20 percent, enter 120 percent.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 74.4 68.6
Entries of exactly 100 11.6 100.0
Entries greater than 100 14.1 153.4
All entries 100.0 84.2

NOTES: 277 responses. This same question was posed in May and June.

What are the primary factors restraining your firm’s revenues? Please select up to three.

    Response
(percent)
Weak demand 62.5
Limited operating capacity due to state/local restrictions 30.8
Limited operating capacity due to staffing shortages (COVID-19 infections and quarantining, absenteeism, difficulty hiring, etc.) 20.4
Reduced productivity due to alternative work arrangements 18.8
Supply chain disruptions 15.8
Other 21.7

NOTES: 240 responses. Thirteen percent of total respondents marked "Not applicable, revenues are not being restrained." This group was excluded from the calculated results for this question.

How does your firm's current employee head count compare with February (pre-COVID)? For example, if head count is down 20 percent from February, enter 80 percent. If head count is up 20 percent, enter 120 percent. Please exclude any changes due to typical seasonality.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 50.7 69.7
Entries of exactly 100 37.9 100.0
Entries greater than 100 11.4 118.4
All entries 100.0 86.7

NOTES: 272 responses. This same question was posed in June.

Has your firm taken any of the following steps over the past month in response to the recent rise in COVID-19 infections in Texas? Please select all that apply.

    Response
(percent)
Increased spending on health and safety equipment at facility 58.7
Decreased number of employees working on-site 49.1
Postponed efforts to bring telecommuting workers back on-site 36.4
Reduced customer capacity at business location(s) 30.0
Partially shut down business operations temporarily 25.1
Postponed plans for recalling furloughed workers or new hiring 14.1
Laid off or furloughed workers 14.1
Fully shut down business operations temporarily 4.2
Partially shut down business operations permanently 2.8
Fully shut down business operations permanently 0.7
None 12.4

NOTE: 283 responses.

What are the primary logistical challenges to operating your business currently? Please select up to three.

    Response
(percent)
Maintaining health protocols at facility (disinfecting surfaces, configuring workspace and/or customer seating arrangements with six feet of separation, etc.) 39.3
Managing employee COVID-19 screening and quarantine/sick leave rules 37.5
Enforcing health protocols among employees (social distancing, hand hygiene, etc.)  36.0
Enforcing face covering and social distancing rules for customers 30.0
Scheduling and maintaining sufficient staffing levels 29.2
Understanding guidelines from state/local officials 25.1
Other 14.6

NOTE: 267 responses.

Given your current outlook, how likely is it that your business will permanently shut down within the next 12 months?

    Response
(percent)
Not likely 90.1
Somewhat likely 6.4
Very likely 3.5

NOTE: 283 responses.

Special Questions Comments

These comments have been edited for publication.

Warehousing and Storage

  • We continue to work efficiently with most of our administrative staff working remotely. We are currently at 25 percent occupancy on our administrative buildings and intend to remain at that level for the foreseeable future.

Publishing Industries (Except Internet)  

  • [We have the] same basic issues: more uncertainty from our customers’ spending than our own COVID-19 challenges due to remote work adaptability.

Credit Intermediation and Related Activities

  • We are anticipating continued adjustments to normal business environment due to the pandemic.

Insurance Carriers and Related Activities

  • Our workforce is on site, but we are restricting access by visitors.

Rental and Leasing Services

  • We have always run our faith-based, very philanthropic, 60-year-old, family-owned company conservatively, unlike many of those companies [that were given] PPP funds. But starting in February, we began eliminating all debt, travel, meals, entertainment, hotels, meetings, etc. We started accumulating cash, and we reduced head count. (We had gotten too heavy anyway and felt we were really going to be too heavy if the virus ramped up, which it has.) So overall, we remain debt free and very strong financially; however, our revenue pipeline is significantly impacted by the virus and our self-induced economic disaster. No business can stand that forever!

Professional, Scientific and Technical Services

  • We have adopted a permanent flexible work experience for all our offices. People can work from home or come in.
  • We are pushing to build opportunities despite the uncertainty.
  • As a sole-proprietor consulting business in the energy arena, I will not shut down. I may not have any revenue, but my expenses are fairly manageable for the next one to three years.
  • [This is] hard to manage, but there's light at the end of the tunnel. Our greatest challenge right now is working capital availability.
  • Our large customers are generally buying. Middle- and small-sized customers (in both the U.S. and overseas) are not buying much at all (versus pre-COVID-19), affecting our revenue.
  • July is not much different from June. We reopened offices starting in May and completed in June. Few changes have been needed in July.

Administrative and Support Services

  • We are booked out for months. We continue to book business, but we simply cannot get it out the door effectively.
  • I need to state once again: We, as a country, need to have one policy for pandemic events. This would expedite the levels of confidence and health of this country, in my opinion, the most. The business of this country can and should continue; we just need to all follow the same rules. I know I do not like confusion from my leaders at this time.
  • Finding and maintaining quality products for our customers has been a challenge.
  • Despite costs related to COVID-19, we have lowered our operating costs and are currently remaining profitable.
  • Technology is a key factor in successfully implementing remote working conditions.
  • There is a lack of understanding of the incubation period and the time frame to return to work. So, if you test positive, you quarantine until there is no fever for three to five days and return to work versus if you come in contact [with an infected person], you quarantine for 14 days. Oh, and if an employee quarantines, you have to pay them. Where do those funds come from? Very confusing!

Ambulatory Health Care Services

  • Other than financial issues (important but far from critical), the delay in patients accessing health care is magnifying every issue—late presentations of medical complications, delayed cancer diagnoses, delayed cancer care, fewer touch points. Telehealth is a very weak substitute on a longer-term basis.
  • The home-based health care service providers are fully equipped to continue to take care of patients in the COVID-19 environment. Key support is needed from mask wearing, social distancing and good hand sanitization techniques by the population at large to minimize a high possibility of community-based infection affecting our staff while they visit the patients’ homes to take care of them. This exposure is of the highest concern because each and every employee with possible COVID-19 infection is quarantined and may not be able to service their assigned patients. Community participation is critical to get this behind us.
  • Air purification system equipment ordered in mid-March and promised in four to six weeks continues to be on "backorder" or else is being shipped to larger customers first we think. Supply-chain communication has been terrible.

Nursing and Residential Care Facilities

  • Despite revenues declining more and more each month since the COVID-19 outbreak, we are absolutely committed to taking care of the 10,000 senior adults in our communities. This has required us to expend significant additional funds to keep all our communities safe and even more so at communities that have had a COVID-19 positive resident or employee. Unfortunately, the senior-living industry as a whole has received little to no relief from governmental agencies to date, unlike the nursing home industry and the overall health care industry, which have received significant relief funds. We are hopeful that will change in the coming months and allow us to continue to care for our seniors as they expect and deserve.

Food Services and Drinking Places

  • We plan to hang in there.  
  • The biggest concern and effect on our business is the extra $600 a week the unemployed are getting to stay at home versus working. That is hurting us, as people don't want to get out and work for a living when the government is giving them more money to stay at home.
  • I really need [permission] to put my mobile carts back to work and start selling my hot dogs; that way I can bring back my 15 employees.
  • Over 50 percent of our employees who test positive are not ill or have minor symptoms. Yet, all others exposed to them must be laid off with pay for 10 days—a burden!

Personal and Laundry Services

  • Rumors are circulating that Gov. [Greg] Abbott may shut down Texas again for 30 days. If this were to happen, it would be detrimental to my businesses and employees.

Religious, Grantmaking, Civic, Professional and Similar Organizations

  • The CARES [Coronavirus Aid, Relief and Economic Security] Act should be extended, especially for the retail sector.
  • Although we are unlikely to shut down within the next 12 months, our business will be severely crippled if this pandemic goes on for another 12 months without a vaccine.

Texas Retail Outlook Survey

Data were collected July 14–22, and 52 Texas retailers responded to the survey.

How do your firm’s current revenues compare with a typical July? For example, if revenues are down 20 percent from normal, enter 80 percent. If revenues are up 20 percent, enter 120 percent.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 76.0 77.9
Entries of exactly 100 6.0 100.0
Entries greater than 100 18.0 138.9
All entries 100.0 90.2

NOTES: 50 responses. This same question was posed in May and June.

What are the primary factors restraining your firm’s revenues? Please select up to three.

    Response
(percent)
Supply chain disruptions 54.3
Weak demand 52.2
Limited operating capacity due to staffing shortages (COVID-19 infections and quarantining, absenteeism, difficulty hiring, etc.) 23.9
Limited operating capacity due to state/local restrictions 21.7
Reduced productivity due to alternative work arrangements 13.0
Other 21.7

NOTES: 46 responses. Six percent of total respondents marked "Not applicable, revenues are not being restrained." This group was excluded from the calculated results for this question.

How does your firm's current employee head count compare with February (pre-COVID)? For example, if head count is down 20 percent from February, enter 80 percent. If head count is up 20 percent, enter 120 percent. Please exclude any changes due to typical seasonality.

    Share of respondents
(percent)
Average response
(percent)
Entries less than 100 52.0 80.0
Entries of exactly 100 44.0 100.0
Entries greater than 100 4.0 142.5
All entries 100.0 91.3

NOTES: 50 responses. This same question was posed in June.

Has your firm taken any of the following steps over the past month in response to the recent rise in COVID-19 infections in Texas? Please select all that apply.

    Response
(percent)
Increased spending on health and safety equipment at facility 70.6
Decreased number of employees working on-site 31.4
Reduced customer capacity at business location(s) 23.5
Postponed efforts to bring telecommuting workers back on-site 23.5
Partially shut down business operations temporarily 19.6
Laid off or furloughed workers 15.7
Postponed plans for recalling furloughed workers or new hiring 7.8
Partially shut down business operations permanently 2.0
Fully shut down business operations temporarily 0.0
Fully shut down business operations permanently 0.0
None 13.7

NOTE: 51 responses.

What are the primary logistical challenges to operating your business currently? Please select up to three.

    Response
(percent)
Enforcing health protocols among employees (social distancing, hand hygiene, etc.)  50.0
Maintaining health protocols at facility (disinfecting surfaces, configuring workspace and/or customer seating arrangements with six feet of separation, etc.) 50.0
Enforcing face covering and social distancing rules for customers 45.8
Managing employee COVID-19 screening and quarantine/sick leave rules 41.7
Scheduling and maintaining sufficient staffing levels 29.2
Understanding guidelines from state/local officials 12.5
Other 2.1

NOTE: 48 responses

Given your current outlook, how likely is it that your business will permanently shut down within the next 12 months?

    Response
(percent)
Not likely 92.2
Somewhat likely 2.0
Very likely 5.9

NOTE: 51 responses.

Special Questions Comments

Merchant Wholesalers, Durable Goods

  • COVID-19 is a business disruptor, but we are powering through the regulations and safety issues to deliver our goods and services to our customers. So far, our customers are being cooperative with us and understanding as we deliver service to them.

Motor Vehicle and Parts Dealers

  • Despite the tremendous increase in COVID-19 cases, we have not seen a drop-off in customer traffic at the dealership retail level.

Building Material and Garden Equipment and Supplies Dealers

  • PPP [Paycheck Protection Program] allowed us to keep employees and bridge our business uncertainty.

Questions regarding the Texas Business Outlook Surveys can be addressed to Emily Kerr at emily.kerr@dal.frb.org.

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