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Special Questions

Special Questions

June 1, 2021

For this month’s survey, Texas business executives were asked supplemental questions on the labor market and price pressures. 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 May 18–26, and 385 Texas business executives responded to the surveys.

1. Are you currently trying to fill low-skill positions (roles typically requiring a high school diploma or less and minimal work experience)?

  May '21
(percent)
Yes 50.9
No 49.1

NOTE: 379 responses.

1a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 2.1
Somewhat difficult 29.6
Very difficult 68.3

NOTES: 189 responses. This question was posed only to those trying to fill low-skill positions.

1b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    77.6
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 68.9
Offering additional training                                                               32.2
Increasing variable pay, including bonuses       31.1
Improving working conditions               20.8
Reducing education and other requirements for new hires    16.4
Increasing benefits  15.3
Other 6.6

NOTES: 183 responses. This question was posed only to those having difficulty filling low-skill positions.

2. Are you currently trying to fill mid-skill positions (roles typically requiring some college or technical training)?

  May '21
(percent)
Yes 55.4
No 44.6

NOTE: 377 responses.

2a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 6.7
Somewhat difficult 44.7
Very difficult 48.6

NOTES: 208 responses. This question was posed only to those trying to fill mid-skill positions.

2b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages  76.0
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 65.1
Offering additional training                                                               38.0
Increasing variable pay, including bonuses       37.0
Improving working conditions               21.9
Increasing benefits  19.3
Reducing education and other requirements for new hires    17.2
Other 9.9

NOTES: 192 responses. This question was posed only to those having difficulty filling mid-skill positions.

3. Are you currently trying to fill high-skill positions (roles typically requiring a college degree or higher)?

  May '21
(percent)
Yes 45.2
No 54.8

NOTE: 376 responses.

3a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 20.1
Somewhat difficult 45.6
Very difficult 34.3

NOTES: 169 responses. This question was posed only to those trying to fill high-skill positions.

3b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages  71.3
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 65.1
Increasing variable pay, including bonuses       38.8
Increasing benefits  24.8
Offering additional training                                                               24.0
Improving working conditions               21.7
Reducing education and other requirements for new hires    11.6
Other 10.1

NOTES: 129 responses. This question was posed only to those having difficulty filling high-skill positions.

4. If costs (including wages) are increasing, to what extent are you passing the higher costs on to customers in the way of price increases?

  Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
None 24.4 41.0 36.0
Some 49.2 43.9 38.4
Most 18.1 10.4 16.7
All 8.4 4.6 8.9

NOTE: 336 responses.

4a. How are you doing this? Please select all that apply.

  May '21
(percent)
Price increases this year  77.9
Price increases next year  34.7
Offering reduced product or service for the same price  12.7
Offering variable pricing or adding contract contingencies to allow for rising input costs  9.9
Adding a temporary price surcharge  1.9
Other 9.4

NOTES: 213 responses. This question was posed only to those passing at least some of the higher costs on to customers.

4b. How has your firm’s ability to pass cost increases on to customers changed over the past six months?

  May '18
(percent)
Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
Much easier now 2.5 1.4 1.8 7.0
Somewhat easier now 23.8 18.9 13.0 23.9
Similar to six months ago 38.8 39.5 46.4 44.2
Somewhat harder now 21.0 23.7 26.7 15.8
Significantly harder now 13.9 16.5 12.1 9.1

NOTES: 330 responses. This question was posed only to those experiencing increasing costs. In May '18, the timeframe was over the past year.

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

1. Are you currently trying to fill low-skill positions (roles typically requiring a high school diploma or less and minimal work experience)?

  May '21
(percent)
Yes 64.3
No 35.7

NOTE: 98 responses.

1a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 1.6
Somewhat difficult 29.5
Very difficult 68.9

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

1b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages 82.8
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 72.4
Offering additional training                                                               39.7
Increasing variable pay, including bonuses       25.9
Reducing education and other requirements for new hires       24.1
Increasing benefits                                                20.7
Improving working conditions               15.5
Other 5.2

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

2. Are you currently trying to fill mid-skill positions (roles typically requiring some college or technical training)?

  May '21
(percent)
Yes 69.4
No 30.6

NOTE: 98 responses.

2a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 8.8
Somewhat difficult 44.1
Very difficult 47.1

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

2b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    88.7
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 62.9
Offering additional training                                                               33.9
Increasing variable pay, including bonuses       32.3
Reducing education and other requirements for new hires    22.6
Improving working conditions               19.4
Increasing benefits  17.7
Other 9.7

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

3. Are you currently trying to fill high-skill positions (roles typically requiring a college degree or higher)?

  May '21
(percent)
Yes 50.0
No 50.0

NOTE: 98 responses.

3a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 22.4
Somewhat difficult 44.9
Very difficult 32.7

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

3b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    78.4
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 70.3
Increasing variable pay, including bonuses       37.8
Increasing benefits  32.4
Offering additional training                                                               21.6
Improving working conditions               18.9
Reducing education and other requirements for new hires    13.5
Other 16.2

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

4. If costs (including wages) are increasing, to what extent are you passing the higher costs on to customers in the way of price increases?

  Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
None 17.2 40.6 15.2
Some 50.5 45.5 44.6
Most 23.2 9.9 29.3
All 9.1 4.0 10.9

NOTE: 92 responses.

4a. How are you doing this? Please select all that apply.

  May '21
(percent)
Price increases this year  84.6
Price increases next year  24.4
Offering variable pricing or adding contract contingencies to allow for rising input costs  20.5
Offering reduced product or service for the same price  16.7
Adding a temporary price surcharge  0.0
Other 7.7

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

4b. How has your firm’s ability to pass cost increases on to customers changed over the past six months?

  May '18
(percent)
Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
Much easier now 1.2 1.0 1.0 15.4
Somewhat easier now 30.2 26.5 12.7 28.6
Similar to six months ago 31.4 35.7 45.1 37.4
Somewhat harder now 24.4 20.4 25.5 14.3
Significantly harder now 12.8 16.3 15.7 4.4

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.

Primary Metal Manufacturing

  • 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.

Fabricated Metal Manufacturing

  • 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.

Plastics and Rubber Products Manufacturing

  • 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?

Machinery Manufacturing

  • 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.

Computer and Electronic Product Manufacturing

  • 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.

Transportation Equipment Manufacturing

  • 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.

Paper Manufacturing

  • 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.

Printing and Related Support Activities

  • 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.

Food Manufacturing

  • 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.

Textile Product Mills

  • 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.

1. Are you currently trying to fill low-skill positions (roles typically requiring a high school diploma or less and minimal work experience)?

  May '21
(percent)
Yes 46.3
No 53.7

NOTE: 281 responses.

1a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 2.3
Somewhat difficult 29.7
Very difficult 68.0

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

1b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    75.2
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 67.2
Increasing variable pay, including bonuses       33.6
Offering additional training                                                               28.8
Improving working conditions               23.2
Increasing benefits  12.8
Reducing education and other requirements for new hires    12.8
Other 7.2

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

2. Are you currently trying to fill mid-skill positions (roles typically requiring some college or technical training)?

  May '21
(percent)
Yes 50.5
No 49.5

NOTE: 279 responses.

2a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 5.7
Somewhat difficult 45.0
Very difficult 49.3

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

2b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    70.0
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 66.2
Offering additional training                                                               40.0
Increasing variable pay, including bonuses       39.2
Improving working conditions               23.1
Increasing benefits  20.0
Reducing education and other requirements for new hires    14.6
Other 10.0

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

3. Are you currently trying to fill high-skill positions (roles typically requiring a college degree or higher)?

  May '21
(percent)
Yes 43.5
No 56.5

NOTE: 278 responses.

3a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 19.2
Somewhat difficult 45.8
Very difficult 35.0

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

3b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    68.5
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 63.0
Increasing variable pay, including bonuses       39.1
Offering additional training                                                               25.0
Improving working conditions               22.8
Increasing benefits  21.7
Reducing education and other requirements for new hires    10.9
Other 7.6

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

4. If costs (including wages) are increasing, to what extent are you passing the higher costs on to customers in the way of price increases?

  Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
None 28.0 41.2 43.9
Some 48.5 43.3 36.1
Most 15.5 10.6 11.9
All 8.0 4.9 8.2

NOTE: 244 responses.

4a. How are you doing this? Please select all that apply.

  May '21
(percent)
Price increases this year  74.1
Price increases next year  40.7
Offering reduced product or service for the same price  10.4
Offering variable pricing or adding contract contingencies to allow for rising input costs  3.7
Adding a temporary price surcharge  3.0
Other 10.4

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

4b. How has your firm’s ability to pass cost increases on to customers changed over the past six months?

  May '18
(percent)
Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
Much easier now 3.1 1.6 2.2 3.8
Somewhat easier now 21.0 15.0 13.2 22.2
Similar to six months ago 42.1 41.5 46.9 46.9
Somewhat harder now 19.5 25.4 27.2 16.3
Significantly harder now 14.4 16.6 10.5 10.9

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.

Telecommunications

  • 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.

Credit Intermediation and Related Activities

  • 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.

Real Estate

  • 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.

Professional, Scientific and Technical Services

  • 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.

Administrative and Support Services

  • 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.

Educational Services

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

Ambulatory Health Care Services

  • 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.

Social Assistance

  • 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.

Food Services and Drinking Places

  • 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.

1. Are you currently trying to fill low-skill positions (roles typically requiring a high school diploma or less and minimal work experience)?

  May '21
(percent)
Yes 66.0
No 34.0

NOTE: 53 responses.

1a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 2.9
Somewhat difficult 20.6
Very difficult 76.5

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

1b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    84.8
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 66.7
Increasing variable pay, including bonuses       30.3
Offering additional training                                                               27.3
Improving working conditions               24.2
Reducing education and other requirements for new hires    18.2
Increasing benefits  12.1
Other 6.1

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

2. Are you currently trying to fill mid-skill positions (roles typically requiring some college or technical training)?

  May '21
(percent)
Yes 59.6
No 40.4

NOTE: 52 responses.

2a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 0.0
Somewhat difficult 45.2
Very difficult 54.8

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

2b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    80.6
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 64.5
Increasing variable pay, including bonuses       48.4
Offering additional training                                                               35.5
Increasing benefits  19.4
Improving working conditions               19.4
Reducing education and other requirements for new hires    12.9
Other 9.7

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

3. Are you currently trying to fill high-skill positions (roles typically requiring a college degree or higher)?

  May '21
(percent)
Yes 20.8
No 79.2

NOTE: 53 responses.

3a. How difficult is it to find workers to fill these positions?

  May '21
(percent)
Not difficult 9.1
Somewhat difficult 45.5
Very difficult 45.5

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

3b. What, if anything, are you doing to recruit and retain employees for these positions? Please check all that apply.

  May '21
(percent)
Increasing wages    88.9
Increasing variable pay, including bonuses       44.4
Intensifying recruiting, including advertising, paying recruiting bonuses, utilizing employment agencies, etc. 44.4
Offering additional training                                                               33.3
Improving working conditions               22.2
Increasing benefits  11.1
Reducing education and other requirements for new hires    11.1
Other 0.0

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

4. If costs (including wages) are increasing, to what extent are you passing the higher costs on to customers in the way of price increases?

  Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
None 18.4 26.5 20.4
Some 52.6 53.1 51.0
Most 15.8 10.2 18.4
All 13.2 10.2 10.2

NOTE: 49 responses.

4a. How are you doing this? Please select all that apply.

  May '21
(percent)
Price increases this year  71.8
Price increases next year  43.6
Offering reduced product or service for the same price  10.3
Adding a temporary price surcharge  2.6
Offering variable pricing or adding contract contingencies to allow for rising input costs  2.6
Other 2.6

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

4b. How has your firm’s ability to pass cost increases on to customers changed over the past six months?

  May '18
(percent)
Dec '18
(percent)
Aug '19
(percent)
May '21
(percent)
Much easier now 2.4 5.3 2.1 6.4
Somewhat easier now 24.4 7.9 14.6 44.7
Similar to six months ago 31.7 28.9 39.6 27.7
Somewhat harder now 24.4 36.8 33.3 14.9
Significantly harder now 17.1 21.1 10.4 6.4

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.

Merchant Wholesalers, Durable Goods

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

Merchant Wholesalers, Nondurable Goods

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

Motor Vehicle and Parts Dealers

  • 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.

Nonstore Retailers

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

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

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