Special Questions

Texas Manufacturing Outlook Survey

Data were collected May 18–26, and 99 Texas manufacturers responded to the survey.

NOTE: 98 responses.

NOTES: 61 responses. This question was posed only to those trying to fill low-skill positions.

NOTES: 58 responses. This question was posed only to those having difficulty filling low-skill positions.

NOTE: 98 responses.

NOTES: 68 responses. This question was posed only to those trying to fill mid-skill positions.

NOTES: 62 responses. This question was posed only to those having difficulty filling mid-skill positions.

NOTE: 98 responses.

NOTES: 49 responses. This question was posed only to those trying to fill high-skill positions.

NOTES: 37 responses. This question was posed only to those having difficulty filling high-skill positions.

NOTE: 92 responses.

NOTES: 78 responses. This question was posed only to those passing at least some of the higher costs on to customers.

NOTES: 91 responses. This question was posed only to those experiencing increasing costs. In May '18, the timeframe was over the past year.

Special Questions Comments

These comments have been edited for publication.

• All input costs are going up: labor, plastics, wood, steel, electronics—everything.
• Our customers’ prices have risen as much as 50 percent due to the base cost of aluminum rising over the past year along with our price increases tied to operating costs. This is true for our industry. The majority of our business is split evenly between the building and construction industry and the transportation industry.
• The construction industry is clamoring for product. If you can supply a yearlong building project, you can sell the job. Cost is now secondary.

• Prices have escalated so fast and are so uncertain that it makes it hard to price material and make normal project quotes. It is very difficult on long projects, which require stable pricing.
• Significant increases in wages and steel prices are much more difficult to recover from customers, especially the material price increases that occur after a job has started.

• Due to pricing agreements we have with some of our customers, it is difficult for us to currently pass on cost increases from labor. We have some room for increases related to rising material costs, though. As with most of Texas, and the country for that matter, we are running into difficulties with hiring.  Unemployment benefits are certainly a cause for concern. In addition, with the media coverage “$15 per hour” gets [as some companies raise their minimum wage], more and more potential applicants are asking to start at that rate. So the question is, who blinks first: the government or Wal-Mart/Amazon?

• We’ve raised prices on over 90 percent of the products we sell. We did this even though we have the inventory, but we don’t have any idea how long this price spike will last. Therefore, to protect our business, we raised prices as if we had to replenish our inventory immediately.
• 1975 [inflation] is here again and sadly, we have learned absolutely nothing.

• Market prices are widely expected to go up, and peers are pushing it much faster. We are following and will see little resistance. Customers are more concerned with availability than with cost.

• Cost pass-through is somewhat easier due to publicity about material shortages and price increases. But it is long-term damaging to our markets when combined with poor public energy policy.
• We can’t pass on higher costs or we’ll lose business.

• Our volume of incoming orders is at an all-time high point, but we cannot deliver all of the orders because of a lack of people wanting to work. Everyone I know that is in similar businesses to mine is experiencing these challenges.

• There is so much rampant inflation occurring right now that it’s the right time to join the fray and increase our prices to maintain our margins.

• We are planning to pass cost increases to customers late this year or early next, but we are anxious about competitors that manufacture outside the U.S. that have been able to maintain costs.
• The ongoing federal unemployment benefit payments have had a direct and negative impact on meeting our employment needs.

• Basic low-skilled workers like warehousemen, forklift drivers, and shipping and receiving clerks are impossible to recruit. The federal unemployment subsidies must end ASAP!

Texas Service Sector Outlook Survey

Data were collected May 18–26, and 286 Texas business executives responded to the survey.

NOTE: 281 responses.

NOTES: 128 responses. This question was posed only to those trying to fill low-skill positions.

NOTES: 125 responses. This question was posed only to those having difficulty filling low-skill positions.

NOTE: 279 responses.

NOTES: 140 responses. This question was posed only to those trying to fill mid-skill positions.

NOTES: 130 responses. This question was posed only to those having difficulty filling mid-skill positions.

NOTE: 278 responses.

NOTES: 120 responses. This question was posed only to those trying to fill high-skill positions.

NOTES: 92 responses. This question was posed only to those having difficulty filling high-skill positions.

NOTE: 244 responses.

NOTES: 135 responses. This question was posed only to those passing at least some of the higher costs on to customers.

NOTES: 239 responses. This question was posed only to those experiencing increasing costs. In May '18, the timeframe was over the past year.

Special Questions Comments

These comments have been edited for publication.

• We are in a highly competitive industry in a highly competitive market (Greater Houston), and because of our relative size, it’s difficult for us to pass increased costs to our customers.

• Market liquidity is negatively impacting our ability to pass on [price] increases.
• Succession for senior management was a big challenge, but adding long-term benefits like salary continuation plans and split-dollar life insurance provided through BOLI [bank-owned life insurance] policies has worked well for our institution.

• Higher input costs (materials and land) and increased inflation are dampening the outlook for matching continued levels of new real estate development projects across the state.

• The idea that the federal unemployment supplements are impeding hiring is ridiculous in the energy industry as the pay scales are higher. Anybody that says higher “low-end” wages will cause layoffs needs to ask: “If it takes this many people to do the work now, how do I get it done with fewer people?” What happened to increasing the price of goods?
• With a service type of profession such as architecture, the fee is generally based on level of effort—complexities of project or a percent of construction cost. In either case, it’s difficult to pass on real-time higher costs (wages, benefits, hardware and software subscriptions etc.) to the customers. As we employ more technology, the cost of business is increasing. These tools of the trade such as 3D modeling software are continually increasing year after year. They do not replace “human resource” in the creative side of the architecture business.
• The market for young lawyers has become a seller’s market, with the largest firms paying large retention bonuses.
• Our clients are refusing to accept any price increases. That puts us in a bind because of increasing labor and nonlabor costs.
• We are not currently looking for new employees because we have added four positions since January. We do expect that we may need to add another one to two positions this year but have not started the process yet. We’re waiting to see if the current level of work remains high.

• Low-wage and mid-range employees choose not to work, [opting] for increased unemployment benefits.  I offered a person a job at a $35,600 annual salary, and she said I’d have to offer her $54,000 annually for her to get off unemployment. It will be difficult to recover from this, and I know Gov. Abbott changed the rules in Texas, but it will be probably August or September for this to trickle down to individuals needing to work again.
• We cannot increase prices for our services because we are working under government contracts with fixed prices.
• We have been swamped by price increases from all our vendors—10-40 percent increases since early March. All we can do is pass these on to the customer. No other clever solution can be implemented right now. If it costs more, [we] charge more at this point.
• We just increased our prices by 5 percent and our fuel-burden multiplier.
• We are in a candidate market. There are more jobs than candidates at all levels. Because candidates are driving the employment decision, as a company we have to be sure we are putting our best foot forward not only in compensation, but also in working conditions, training, company brand, meaningful work and employee engagement. Candidates are continuing to interview even after accepting offers and accepting counteroffers from current employers because they know they are in the driver’s seat. It's going to be a bumpy road for employers.

• We are actively choosing not to pass higher supply costs on to customers until the economy appears stronger at all income levels.

• In health care, we are unable to raise prices. Our fee schedules are determined by CMS [Centers for Medicare and Medicaid Services] and the payers. It is a deflationary business, with lower reimbursement expected in the future. We are very efficient!
• In health care, it is not possible to pass on additional costs.

• The unemployment benefits and stimulus have taken a large portion of job seekers out of the market.  Worse yet, many are applying and not showing up to interviews or the first day of work. This is costing additional advertising dollars. Further, it is not fair for incumbent workers.

• How can I raise my prices when we have empty seats?
• The government has to stop encouraging people to stay home. Able-bodied people need to be working.

Texas Retail Outlook Survey

Data were collected May 18–26, and 54 Texas retailers responded to the survey.

NOTE: 53 responses.

NOTES: 34 responses. This question was posed only to those trying to fill low-skill positions.

NOTES: 33 responses. This question was posed only to those having difficulty filling low-skill positions.

NOTE: 52 responses.

NOTES: 31 responses. This question was posed only to those trying to fill mid-skill positions.

NOTES: 31 responses. This question was posed only to those having difficulty filling mid-skill positions.

NOTE: 53 responses.

NOTES: 11 responses. This question was posed only to those trying to fill high-skill positions.

NOTES: 9 responses. This question was posed only to those having difficulty filling high-skill positions.

NOTE: 49 responses.

NOTES: 39 responses. This question was posed only to those passing at least some of the higher costs on to customers.

NOTES: 47 responses. This question was posed only to those experiencing increasing costs. In May '18, the timeframe was over the past year.

Special Questions Comments

These comments have been edited for publication.

• [Input] costs can’t be passed along.

• We distribute commodities to restaurants, so it’s common and acceptable that prices will fluctuate.

• Increased unemployment and stimulus payments need to stop to encourage these low- and mid-skill-level people to get back to work!
• Demand is outpacing the rate of price increases. Labor shortages are placing constraints on businesses’ ability to perform work in a timely manner—and allowing us to increase prices if we have the product or service available now.

• Many of our customers recognize that costs are rising across the board and are more accepting of us raising our prices.