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Special Questions

Special Questions

November 30, 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.

Texas Business Outlook Surveys

Data were collected November 16–24, and 387 Texas business executives responded to the surveys.

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

  May '20
(percent)
Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced revenues 81.2 75.6 74.2 68.3 62.0 63.7
Average revenue decline (Y/Y) -38.3 -32.4 -29.1 -29.9 -31.3 -28.7
Share of firms reporting increased revenues 10.2 13.7 15.5 18.3 21.0 19.9
Average revenue increase (Y/Y) 20.1 20.2 23.3 17.6 20.6 17.7
Share of firms reporting no change in revenues 8.6 10.6 10.3 13.4 17.0 16.4

NOTES: 372 responses. In past months the question wording was adjusted to reference the respective month of comparison. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average revenue decline is calculated using only responses from firms that reported reduced revenues. Average revenue increase is calculated using only responses from firms that reported increased revenues.

When do you expect your firm’s revenues to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       0.4 1.7
1-3 months       11.6 6.4
4-6 months       21.1 20.6
7-9 months       15.5 11.6
10-12 months       16.5 18.5
More than a year       31.3 36.9
We do not expect revenue to return to pre-COVID levels       3.5 4.3

NOTES: 233 responses. This question was only posed to those indicating November revenues are below normal.

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.

    Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced head count   43.0 51.2 51.4 49.2 51.1
Average head count decline (compared with Feb. 2020 levels)   -26.5 -25.4 -27.2 -30.6 -28.4
Share of firms reporting increased head count   12.3 14.0 15.4 17.5 13.2
Average head count increase (compared with Feb. 2020 levels)   10.8 15.6 21.0 14.8 15.2
Share of firms reporting no change in head count   44.6 34.8 33.2 33.3 35.7

NOTES: 370 responses. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average head count decline is calculated using only responses from firms that reported reduced head count. Average head count increase is calculated using only responses from firms that reported increased head count.

When do you expect your firm’s head count to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       5.0 4.9
1-3 months       12.6 4.9
4-6 months       17.0 14.6
7-9 months       10.7 9.7
10-12 months       9.4 16.8
More than a year       26.4 30.8
We do not expect head count to return to pre-COVID levels       18.9 18.4

NOTES: 185 responses. This question was only posed to those indicating their November head count is down from pre-COVID levels.

What steps, if any, is your firm taking in response to rising COVID-19 cases?

    Nov. '20
(percent)
Trimming operating expenses (e.g., maintenance, office expenses, advertising) 68.5
Reducing or postponing capital expenditures 54.0
Scaling back business operations 24.9
Reducing employee hours 23.2
Implementing a hiring freeze 22.1
Laying off workers 19.7
Reducing employee compensation or benefits 12.8
Temporarily shutting down operations 11.4
Permanently shutting down operations 1.7
Other 15.2

NOTE: 289 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 November 16–24, and 107 Texas manufacturers responded to the survey.

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

  May '20
(percent)
Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced revenues 78.0 70.6 73.8 68.6 60.8 57.7
Average revenue decline (Y/Y) -38.6 -34.4 -30.5 -28.7 -28.9 -30.7
Share of firms reporting increased revenues 16.5 16.5 19.4 20.0 23.5 29.8
Average revenue increase (Y/Y) 19.1 20.6 27.3 24.6 22.5 19.3
Share of firms reporting no change in revenues 5.5 12.8 6.8 11.4 15.7 12.5

NOTES: 104 responses. In past months the question wording was adjusted to reference the respective month of comparison. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average revenue decline is calculated using only responses from firms that reported reduced revenues. Average revenue increase is calculated using only responses from firms that reported increased revenues.

When do you expect your firm’s revenues to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       0.0 0.0
1-3 months       4.0 5.1
4-6 months       24.0 25.4
7-9 months       18.7 15.3
10-12 months       25.3 15.3
More than a year       26.7 32.2
We do not expect revenue to return to pre-COVID levels       1.3 6.8

NOTES: 59 responses. This question was only posed to those indicating November revenues are below normal.

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.

    Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced head count   42.6 52.5 47.6 43.6 49.0
Average head count decline (compared with Feb. 2020 levels)   -20.7 -23.0 -23.9 -22.9 -24.5
Share of firms reporting increased head count   15.7 21.2 21.9 16.8 17.3
Average head count increase (compared with Feb. 2020 levels)   9.2 22.5 17.1 13.1 22.0
Share of firms reporting no change in head count   41.7 26.3 30.5 39.6 33.7

NOTES: 104 responses. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average head count decline is calculated using only responses from firms that reported reduced head count. Average head count increase is calculated using only responses from firms that reported increased head count.

When do you expect your firm’s head count to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       2.2 4.0
1-3 months       10.9 8.0
4-6 months       21.7 8.0
7-9 months       15.2 10.0
10-12 months       13.0 24.0
More than a year       26.1 32.0
We do not expect head count to return to pre-COVID levels       10.9 14.0

NOTES: 50 responses. This question was only posed to those indicating their November head count is down from pre-COVID levels.

What steps, if any, is your firm taking in response to rising COVID-19 cases?

    Nov. '20
(percent)
Trimming operating expenses (e.g., maintenance, office expenses, advertising) 70.4
Reducing or postponing capital expenditures 60.5
Reducing employee hours 29.6
Scaling back business operations 27.2
Laying off workers 23.5
Implementing a hiring freeze 18.5
Temporarily shutting down operations 11.1
Reducing employee compensation or benefits 7.4
Permanently shutting down operations 2.5
Other 11.1

NOTE: 81 responses.

Special Questions Comments

These comments have been edited for publication.

Chemical Manufacturing

  • We have developed a plan to maintain current production activities with a reduced staff, putting cost savings of lower-sales employees and travel expenses into automation.

Plastics and Rubber Products Manufacturing

  • There has been a slight increase in both new production orders as well as requests for new product quotes. Both were unexpected given the current market conditions. Most likely, the increases in both could be attributed to a number of factors, such as previous vendors going out of business or companies searching for lower-cost solutions. In any case, we are approaching this uptick with cautious optimism. While this increased level of business will most likely will not sustain us into the new year, we'll take it.

Nonmetallic Mineral Product Manufacturing

  • To date, we have not seen an impact from COVID-19 to our business. We have continued to operate as usual while implementing new protocols (following CDC [Centers for Disease Control] guidelines) to protect employees, customers, contractors, etc.
  • We are an essential business. We have increased production in the second half of 2020 and added more people. We are practicing social distancing and requiring face masks in our facilities. We quarantine anyone who may get exposed. So far, we have only had a few isolated cases.

Primary Metal Manufacturing

  • Short of the potential impact of an even-greater economic downturn, we expect most of our manufacturing categories, which have benefited from "stay at home" orders and an unrelated cyclical recovery of our niche agriculture markets, to remain stable. We have one category of our business related to furniture, which spiked up during the summer but has slumped again, that we believe is related to the ending of supplemental government assistance.
  • We had a layoff in March but have been hiring since September as business picked up in late summer.

Fabricated Metal Manufacturing

  • The significant surge in demand has put additional pressure on the workforce. Additional safety precautions are required to keep your people safe, healthy and at work. It has been very difficult to hire people over the last several months.
  • We have not laid off any employees and will increase hiring as our work backlog improves.

Machinery Manufacturing

  • We are cherry-picking other companies that are firing their best sales and technical people. I’m willing to hire these best people for the long-term benefit of my company even though it will cost money to do so. I firmly believe that taking on some debt now will pay off long term in employees that will be loyal and productive. You have to think long term if you expect to survive and grow.
  • We have not seen "typical" in quite a while. There is no more "typical"; there is only survival.
  • We did not lay off anyone during COVID-19. We did have to reduce hours somewhat and cut salaries. We have been back to normal hours and pay for a while now. We got a PPP [Paycheck Protection Program] loan, which saved our business and our employees' jobs. It would be very nice to get more guidance on PPP forgiveness.
  • We are continuing to look at cost-cutting measures, including employee reductions.

Transportation Equipment Manufacturing

  • Our revenue recovery has already occurred. Head count hasn't gone down.

Food Manufacturing

  • We are unique. We have a saying now for each day: assess, communicate, adapt and move forward. The supply chain has had a few issues for us but has not materially altered our ability to complete orders on time.

Wood Product Manufacturing

  • We are an essential business, and we have been really busy.

Paper Manufacturing

  • Demand and general business activity are comparable to pre-COVID-19 levels.

Miscellaneous Manufacturing

  • Masks, temperature-taking and employee separation is the best we can do. We need to ship to stay in business.

 

Texas Service Sector Outlook Survey

Data were collected November 16–24, and 280 Texas business executives responded to the survey.

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

  May '20
(percent)
Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced revenues 82.5 77.6 74.4 68.2 62.5 66.0
Average revenue decline (Y/Y) -38.4 -31.8 -28.7 -30.5 -32.5 -28.1
Share of firms reporting increased revenues 7.7 12.6 14.1 17.7 20.1 16.0
Average revenue increase (Y/Y) 23.1 21.9 23.1 16.6 19.7 16.4
Share of firms reporting no change in revenues 9.9 9.7 11.6 14.1 17.5 17.9

NOTES: 268 responses. In past months the question wording was adjusted to reference the respective month of comparison. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average revenue decline is calculated using only responses from firms that reported reduced revenues. Average revenue increase is calculated using only responses from firms that reported increased revenues.

When do you expect your firm’s revenues to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       0.5 2.3
1-3 months       14.4 6.9
4-6 months       20.1 19.0
7-9 months       14.4 10.3
10-12 months       13.4 19.5
More than a year       33.0 38.5
We do not expect revenue to return to pre-COVID levels       4.3 3.4

NOTES: 174 responses. This question was only posed to those indicating November revenues are below normal.

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.

    Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced head count   43.2 50.7 52.8 51.3 51.9
Average head count decline (compared with Feb. 2020 levels)   -29.3 -26.7 -28.8 -33.1 -30.4
Share of firms reporting increased head count   11.0 11.4 13.0 17.7 11.7
Average head count increase (compared with Feb. 2020 levels)   12.8 13.4 23.7 15.4 11.1
Share of firms reporting no change in head count   45.8 37.9 34.2 31.0 36.5

NOTES: 266 responses. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average head count decline is calculated using only responses from firms that reported reduced head count. Average head count increase is calculated using only responses from firms that reported increased head count.

When do you expect your firm’s head count to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       6.2 5.2
1-3 months       13.3 3.7
4-6 months       15.0 17.0
7-9 months       8.8 9.6
10-12 months       8.0 14.1
More than a year       26.5 30.4
We do not expect head count to return to pre-COVID levels       22.1 20.0

NOTES: 135 responses. This question was only posed to those indicating their November head count is down from pre-COVID levels.

What steps, if any, is your firm taking in response to rising COVID-19 cases?

    Nov. '20
(percent)
Trimming operating expenses (e.g., maintenance, office expenses, advertising) 67.8
Reducing or postponing capital expenditures 51.4
Scaling back business operations 24.0
Implementing a hiring freeze 23.6
Reducing employee hours 20.7
Laying off workers 18.3
Reducing employee compensation or benefits 14.9
Temporarily shutting down operations 11.5
Permanently shutting down operations 1.4
Other 16.8

NOTE: 208 responses.

Special Questions Comments

These comments have been edited for publication.

Truck Transportation

  • We're a truck repair shop—an essential business. We're constantly cleaning and disinfecting, but otherwise it's business as usual.

Warehousing and Storage

  • The steps taken in response to COVID-19 were in the near term, i.e., for 2020. For 2021, we expect to resume an aggressive program of maintenance and capital expansion to address what we believe remain to be long-term expansion of energy growth for the U.S. Gulf Coast.

Publishing Industries (Except Internet)

  • The trends remain positive for the very early first quarter to be stronger.

Securities, Commodity Contracts, and Other Financial Investments and Related Activities

  • We have delayed major equipment repairs and any expenditure that can be canceled or moved out.

Insurance Carriers and Related Activities

  • As a result of COVID-19, we expect a permanent effect of work from home and anticipate lowering the amount of office space we need.
  • Property and liability insurance are rather necessary, so we are operating fairly normally. We are seeing some liability insurance pricing, like for employment practices and directors and officers, increasing, and COVID-19 is sometimes mentioned as a contributing factor.

Real Estate

  • What are we doing in response to COVID-19? Making capital investments in PPE [personal protective equipment], moving employees to work at home or rearranging office layouts, adding cleaning personnel, implementing systems to comply with local directives, trying to assist our tenants in getting assistance for their businesses, and much more.

Rental and Leasing Services

  • We have not trimmed marketing, which has helped us keep viable even in an economy where we are forced “not” to work. We will prevail. We have also just started another company to assist the event and hospitality world with sanitizing solutions for the event, corporate, hotel and other spaces where people are gathering.
  • We actually just gave raises to all our hourly personnel by 5 percent. We are not raising any salaried or commission personnel at this time.

Professional, Scientific and Technical Services

  • The U.S. election results of President Trump's loss will have big negative impacts on the overall growth and mood. President Trump was so good for all business, especially small ones like ours.
  • As a sole proprietor (consultant), networking is the major source of my acquisition of work. The inability to meet with people I don't know at various events, technical meetings, etc., has restricted my ability to gain new business. While my previous clients are kept aware of my capabilities, their project workload has declined tremendously.
  • We are able to have most of our employees work remotely. Those who cannot and who are critical to our on-site operations either are working as essential workers or are being carried based on an expectation of return to the office by the second quarter.
  • We have not changed our employee head count due to COVID-19 and expect an increase if the vaccine is efficacious and widely available. We have stayed busy during the entire pandemic and never closed our office, although we expanded remote working for employee safety.

Management of Companies and Enterprises

  • COVID-19’s negative impact on the economy has drastically reduced loan demand, while politics/election results have businesses fearful of their future regarding potential cost of operation increases. Thus, many depositors remain short in their investment horizon, and this results in major increases in bank deposits as consumers/businesses are staying very liquid. With higher-yielding bond portfolios rolling off the banks’ balance sheets and being replaced in much lower-yielding investments, it really puts pressure on commercial banks to lower their cost of funds since loans/borrowers continue paying historically low interest rates. In short, our net interest margin is at all-time lows, so this points banks to lowering their cost of funds (depositor interest rates).

Administrative and Support Services

  • We cannot do anything other than take what comes at us—day to day, week to week.
  • Employees are working on an A and B schedule, limiting capacity to socially distance. [We have implemented] mandatory masks and limiting nonemployees in the office.
  • We provide temporary nursing staff. Demand is high. Professional and general liability [insurance pricing] has increased 250 percent along with a reduction in companies willing to insure our type of industry due to the risk involved.
  • We have been practicing very carefully monitored COVID-19 protection behaviors and sanitation since returning to work months ago. Our employees helped design the measures, following them and updating to the governmental guidelines that would constitute a safe working environment for them. It has worked very well.

Ambulatory Health Care Services

  • Secondary and tertiary effects will hit health care with significant rising demand, more burnout, less reimbursement and rising A/R [accounts receivable].
  • It’s extremely challenging for a small business to lay off employees as that would result in [lost] work experience and relationships built with the employees. All of the small business owners were preparing for a bounce back to normal in the October–November period as COVID-19 appeared to decline. But with this resurgence, small businesses, especially in health care, are dealing with the burnout factor as our clinical teams are having to deal with the COVID-19 challenges at home as well as at work.
  • We have the safest dental office and lowest airborne viral load in Dallas after investing five months ago in the same anti-viral system used by the U.S. Army to protect 60 forts, the FBI to protect Quantico and Johns Hopkins to protect presidents. It quickly kills viruses in the air and on exposed surfaces where they occur rather than sweeping virus-filled air across a room to pass through a filtration system. So, we're letting current and potential patients know they can safely get their dental needs met—business as usual.

Social Assistance

  • The biggest controllable impact that could help [our] operations is to implement an unemployment benefit policy that encourages individuals to work. Further, TWC's [Texas Workforce Commission's] policy of approving all unemployment claims is causing our HR department to spend 50–75 percent of their time in unemployment hearings, which we successfully defend in more than 95 percent of those cases. We need the state and federal government to develop good policy.

Accommodation

  • Our industry needs assistance from the federal government. Until a stimulus is passed, we will struggle to meet our debt, and we will not be able to hire back our laid off workers.

Food Services and Drinking Places

  • We are struggling to find employees who want to work. Lots of people apply for jobs and never show up for the interview. This is done to satisfy unemployment requirements.

Religious, Grantmaking, Civic, Professional and Similar Organizations

  • We are now back to a normal level of activity, although most is done virtually.

Texas Retail Outlook Survey

Data were collected November 16–24, and 50 Texas retailers responded to the survey.

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

  May '20
(percent)
Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced revenues 90.7 78.4 76.0 67.9 58.5 66.7
Average revenue decline (Y/Y) -35.0 -34.0 -21.1 -25.6 -28.5 -23.1
Share of firms reporting increased revenues 1.9 15.7 18.0 18.9 22.6 20.8
Average revenue increase (Y/Y) 20.0 15.0 20.7 21.8 22.0 30.3
Share of firms reporting no change in revenues 7.4 5.9 6.0 13.2 18.9 12.5

NOTES: 48 responses. In past months the question wording was adjusted to reference the respective month of comparison. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average revenue decline is calculated using only responses from firms that reported reduced revenues. Average revenue increase is calculated using only responses from firms that reported increased revenues.

When do you expect your firm’s revenues to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       0.0 3.1
1-3 months       15.0 6.3
4-6 months       32.5 21.9
7-9 months       20.0 9.4
10-12 months       10.0 31.3
More than a year       12.5 18.8
We do not expect revenue to return to pre-COVID levels       10.0 9.4

NOTES: 32 responses. This question was only posed to those indicating November revenues are below normal.

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.

    Jun. '20
(percent)
Jul. '20
(percent)
Aug. '20
(percent)
Sep. '20
(percent)
Nov. '20
(percent)
Share of firms reporting reduced head count   41.2 52.0 45.3 53.7 46.9
Average head count decline (compared with Feb. 2020 levels)   -26.1 -17.4 -27.0 -31.2 -25.6
Share of firms reporting increased head count   7.8 4.0 13.2 7.4 12.2
Average head count increase (compared with Feb. 2020 levels)   11.3 42.5 20.0 18.8 8.7
Share of firms reporting no change in head count   51.0 44.0 41.5 38.9 40.8

NOTES: 49 responses. Averages are calculated as trimmed means with the lowest and highest 7.5 percent of responses omitted. Average head count decline is calculated using only responses from firms that reported reduced head count. Average head count increase is calculated using only responses from firms that reported increased head count.

When do you expect your firm’s head count to return to pre-COVID levels?

          Jun. '20
(percent)
Nov. '20
(percent)
Less than a month       5.3 9.1
1-3 months       26.3 4.5
4-6 months       21.1 18.2
7-9 months       5.3 4.5
10-12 months       5.3 22.7
More than a year       5.3 18.2
We do not expect head count to return to pre-COVID levels       31.6 22.7

NOTES: 22 responses. This question was only posed to those indicating their November head count is down from pre-COVID levels.

What steps, if any, is your firm taking in response to rising COVID-19 cases?

    Nov. '20
(percent)
Trimming operating expenses (e.g., maintenance, office expenses, advertising) 62.2
Reducing or postponing capital expenditures 54.1
Reducing employee hours 21.6
Laying off workers 13.5
Scaling back business operations 8.1
Implementing a hiring freeze 8.1
Reducing employee compensation or benefits 8.1
Temporarily shutting down operations 2.7
Permanently shutting down operations 0.0
Other 8.1

NOTE: 37 responses.

Special Questions Comments

Merchant Wholesalers, Durable Goods

  • All nonessential operations positions continue to work remotely.

Merchant Wholesalers, Nondurable Goods

  • Fourth quarter is usually our strongest quarter for eating out. Lots of restaurant demand has been shifted to order delivery and take-out. Sales continue to beat expectations for the national chains we support. If in-store holiday retail sales pan out, I would expect dining-out sales to go hand in hand and increase as well. The vaccine will help get people back on the streets and dining out, which will benefit my industry and business.

Motor Vehicle and Parts Dealers

  • We are completely back to pre-COVID-19 business levels.
  • We are seeing an uptick in infection cases with COVID-19. There is renewed focus on separation within working areas, contact tracing, increased testing and increased cleaning.
  • We want to hire additional full-time employees but are struggling to find qualified applicants.

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

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