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Special Questions

Special Questions

May 31, 2022

For this month’s survey, Texas business executives were asked supplemental questions on supply-chain disruptions and costs. 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 17–25, and 354 Texas business executives responded to the surveys.

1. Are you currently experiencing any supply-chain disruptions or delays?

Feb. '21
(percent)
Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Yes 35.5 61.0 64.5 69.7 64.7 64.9
No 64.5 39.0 35.5 30.3 35.3 35.1

NOTE: 350 responses.

1a. How have these supply-chain disruptions or delays changed over the past month?

Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Improved significantly 2.2 1.3 0.8 0.0 0.9
Improved slightly 16.6 17.3 18.3 24.9 33.0
No change 21.4 30.5 29.3 35.6 30.0
Worsened slightly 41.0 34.1 39.0 29.2 30.0
Worsened significantly 18.8 16.8 12.6 10.3 6.2

NOTES: 227 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays..

1b. When do you expect your supply chain to return to normal?

  Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Less than a month 0.5 0.0 0.5 0.5 0.0
1–3 months 8.9 8.4 7.0 4.1 4.7
4–6 months 38.1 28.3 26.6 25.4 20.2
7–9 months 24.3 22.0 19.6 19.7 15.5
10– 12 months 14.9 23.0 21.0 23.3 22.3
More than a year 13.4 18.3 25.2 26.9 37.3

NOTES: 227 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays. These calculations exclude respondents that answered “Not sure,” which represented 11.8 percent of responses in June ’21, 15.9 percent in Sep. ’21, 13.7 percent in Nov. ’21, 17.9 percent in Feb. ’22 and 15.0 percent in May ’22.

Downloadable chart | Chart data

2. 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)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
None 24.4 41.0 36.0 41.3 24.1 32.1
Some 49.2 43.9 38.4 37.5 40.6 43.4
Most 18.1 10.4 16.7 14.1 24.1 16.5
All 8.4 4.6 8.9 7.2 11.1 8.1

NOTE: 346 responses.

2a. How are you doing this? Please select all that apply.

  May '21
(percent)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
Raising prices in 2022 34.7 33.2 75.0 84.5
Raising prices in 2023 * * * 29.2
Offering variable pricing or adding contract contingencies to allow for rising input costs 9.9 13.9 21.6 19.7
Adding a temporary price surcharge 1.9 ** 9.7 12.9
Offering reduced product or service for the same price 12.7 6.4 10.2 4.7
Other 9.4 6.4 5.9 5.2

NOTES: 233 responses. This question was posed only to those passing at least some of the higher costs on to customers. *This answer choice was introduced in the May ’22 survey. **This answer choice was not included in the Jul. ’21 survey.

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 17–25, and 85 Texas manufacturers responded to the survey.

1. Are you currently experiencing any supply-chain disruptions or delays?

Feb. '21
(percent)
Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Yes 61.8 86.1 92.0 92.5 92.5 83.3
No 38.2 13.9 8.0 7.5 7.5 16.7

NOTE:84 responses.

1a. How have these supply-chain disruptions or delays changed over the past month?

Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Improved significantly 2.3 1.3 0.0 0.0 0.0
Improved slightly 11.5 10.0 16.5 23.3 35.7
No change 23.0 31.3 27.1 33.7 21.4
Worsened slightly 43.7 37.5 43.5 29.1 35.7
Worsened significantly 19.5 20.0 12.9 14.0 7.1

NOTES: 70 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays.

1b. When do you expect your supply chain to return to normal?

  Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Less than a month 0.0 0.0 1.3 0.0 0.0
1–3 months 6.7 7.6 5.3 1.5 3.4
4–6 months 33.3 31.8 30.7 31.8 22.0
7–9 months 28.0 24.2 17.3 22.7 16.9
10– 12 months 17.3 18.2 20.0 18.2 27.1
More than a year 14.7 18.2 25.3 25.8 30.5

NOTES: 70 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays. These calculations exclude respondents that answered “Not sure,” which represented 13.8 percent of responses in June ’21, 18.5 percent in Sep. ’21, 12.8 percent in Nov. ’21, 23.3 percent in Feb. ’22 and 15.7 percent in May ’22.

Downloadable chart | Chart data

2. 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)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
None 17.2 40.6 15.2 24.2 6.9 13.1
Some 50.5 45.5 44.6 41.8 35.6 42.9
Most 23.2 9.9 29.3 24.2 35.6 29.8
All 9.1 4.0 10.9 9.9 21.8 14.3

NOTE: 84 responses.

2a. How are you doing this? Please select all that apply.

  May '21
(percent)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
Raising prices in 2022 24.4 33.3 76.5 87.7
Raising prices in 2023 * * * 28.8
Adding a temporary price surcharge 0.0 ** 21.0 20.5
Offering variable pricing or adding contract contingencies to allow for rising input costs 20.5 18.8 25.9 17.8
Offering reduced product or service for the same price 16.7 4.3 8.6 1.4
Other 7.7 2.9 1.2 2.7

NOTES: 73 responses. This question was posed only to those passing at least some of the higher costs on to customers. *This answer choice was introduced in the May ’22 survey. **This answer choice was not included in the Jul. ’21 survey.

Special Questions Comments

These comments have been edited for publication.

Chemical Manufacturing

  • We have learned to deal with the supply-chain delays.

Plastics and Rubber Products Manufacturing

  • Material availability is becoming more of an issue. Certain grades and sizes of metal are getting harder to find, which in turn is increasing their cost. Chemicals used in elastomer production are steadily increasing or are getting harder to acquire due to shutdowns in manufacturers overseas. The Ukraine–Russia war is probably not helping matters. This is compounded by the fact that we still struggle to find qualified applicants for open positions. Even with a pay rate increase and additional incentives, it is difficult. When we manage to get a new employee in the door, they last a few weeks. It takes 10 new hires to get one that stays. Positions are remaining unfilled for extended periods of time.

Primary Metal Manufacturing

  • Cost increases affect all of our industry at around the same time. Therefore, it is relatively easy to raise our selling prices because our competitors are also raising their selling prices. So, all cost increases are passed on to our customers.

Machinery Manufacturing

  • We began raising prices in September of 2021. We have raised them three times since then. Pricing has doubled in eight months. We are at a 100 percent inflation rate; those folks are lying at 8 percent.
  • We have passed along all cost increases and will continue to do so. We’ve not encountered any resistance up to this time because we’ve been able to ship products when our customers needed them in a very timely fashion. Our planning for just this situation is paying off since we increased our inventory two years ago and continue to pay close attention to our inventory and order far in advance of any supply problems.

Paper Manufacturing

  • Supply-chain and logistics issues are improving, but the core problems still exist, and the theme seems to be not enough people wanting to work.

 

Texas Service Sector Outlook Survey

Data were collected May 17–25, and 269 Texas business executives responded to the survey.

1. Are you currently experiencing any supply-chain disruptions or delays?

Feb. '21
(percent)
Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Yes 25.5 51.8 55.3 61.6 55.2 59.0
No 74.5 48.2 44.7 38.4 44.8 41.0

NOTE: 266 responses.

1a. How have these supply-chain disruptions or delays changed over the past month?

Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Improved significantly 2.1 1.4 1.2 0.0 1.3
Improved slightly 19.7 21.2 19.3 25.9 31.8
No change 20.4 30.1 30.4 36.7 33.8
Worsened slightly 39.4 32.2 36.6 29.3 27.4
Worsened significantly 18.3 15.1 12.4 8.2 5.7

NOTES: 157 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays..

1b. When do you expect your supply chain to return to normal?

  Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Less than a month 0.8 0.0 0.0 0.8 0.0
1–3 months 10.2 8.8 7.9 5.5 5.2
4–6 months 40.9 26.4 24.5 22.0 19.4
7–9 months 22.0 20.8 20.9 18.1 14.9
10– 12 months 13.4 25.6 21.6 26.0 20.1
More than a year 12.6 18.4 25.2 27.6 40.3

NOTES: 157 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays. These calculations exclude respondents that answered “Not sure,” which represented 10.6 percent of responses in June ’21, 14.4 percent in Sep. ’21, 14.2 percent in Nov. ’21, 14.8 percent in Feb. ’22 and 14.6 percent in May ’22.

Downloadable chart | Chart data

2. 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)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
None 28.0 41.2 43.9 48.0 30.7 38.2
Some 48.5 43.3 36.1 35.8 42.5 43.5
Most 15.5 10.6 11.9 10.0 19.7 12.2
All 8.0 4.9 8.2 6.1 7.0 6.1

NOTE: 262 responses.

2a. How are you doing this? Please select all that apply.

  May '21
(percent)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
Raising prices in 2022 40.7 33.1 74.2 83.1
Raising prices in 2023 * * * 29.4
Offering variable pricing or adding contract contingencies to allow for rising input costs 3.7 11.0 19.4 20.6
Adding a temporary price surcharge 3.0 ** 3.9 9.4
Offering reduced product or service for the same price 10.4 7.6 11.0 6.3
Other 10.4 8.5 8.4 6.3

NOTES: 160 responses. This question was posed only to those passing at least some of the higher costs on to customers. *This answer choice was introduced in the May ’22 survey. **This answer choice was not included in the Jul. ’21 survey.

Special Questions Comments

These comments have been edited for publication.

Support Activities for Transportation

  • Used commercial trailer prices continue to be extremely elevated, [which is not] allowing me to buy more trailers to lease.

Warehousing and Storage

  • We are currently not considering rate increases, but we do increase rates annually based on PPI [Producer Price Index], so we took a 2.5 percent rate hike in January and will probably have another significant one for 2022.

Publishing Industries (Except Internet)

  • It's more about our customers’ challenges in the supply chain than ours due to our business model, which is software development based with minimal direct hardware effects.

Insurance Carriers and Related Activities

  • Property insurance continues to increase due to increasing property values and increased storms (wind and hail) in Texas. Auto is a challenge to some due to increased vehicle repair costs and distracted-driving claims.

Real Estate

  • In the apartment business, lease contracts are typically fixed for one year, whereas input prices are not. The lag is squeezing us.
  • [There is a] lack of inventory in the housing market.

Rental and Leasing Services

  • In the last couple of months, customers have started to push back significantly at these crazy price increases of 20 to 30 percent on heavy construction machinery. Before, they just paid the price; they had to have it, they couldn't find it anywhere else and they were afraid the price was going up even higher. Now, they are beginning to think they just don't need it and that they'll make do with what they have. So the Fed [Federal Reserve] will intentionally induce a recession, and that will fix the supply chain, and we'll all enjoy a lower standard of living trying to pay high interest and inflation costs in large part caused by all the free money the Fed gave away for two years.

Professional, Scientific and Technical Services

  • The shortage of qualified workers is hampering growth and causing business instability. We are not seeing improvement in the near future. It takes a long time to train qualified workers, especially in professional services. Retirement is removing much-needed experience from the workforce and marketplace. Rapid wage inflation is causing a great deal of pressure and stress for small businesses. We're under water when it comes to having a qualified workforce that's willing to work. We need immigration reform to expand the pool of qualified workers.
  • My consulting business is based on the type of work being done and the clients being served. I am not really dependent on supply-chain issues as my products are opinions and recommendations based on existing data and observations.
  • The government cannot spend us out of this mess. They need to stop; they are making this all worse. Our current elected officials show zero understanding of what causes inflation.
  • We are beginning to look at increasing our hourly consulting fee to offset the costs of travel, office supplies and general expenses. We haven't up to this point but are thinking we will need to by fall 2022.
  • We currently have an order backlog due to supply-chain problems of $15.8 million, which is up from $13.2 million at the end of last month. In a more normal year, our backlog runs between $2 million and $4 million. These are firm orders we have received from our customers that we can't fulfill because the product is on backorder.

Administrative and Support Services

  • We implemented a price increase at the beginning of 2022.
  • We do everything we can to maintain our targets. It is extremely difficult and challenging.

Educational Services

  • As a state-controlled institution, we are unable to change prices without significant lead time (several years).
  • All costs are rising. And we hire the best trainers/instructors so we will continue to pay them more. But our health care for those employees is also rising. Our clients have to fund it.

Ambulatory Health Care Services

  • Because most of our health care services are provided through insurance carriers, there is no ability for us to raise our prices outside of contract renegotiations.
  • We anticipated inflation would start spiking in 2022, so Jan. 1 we "priced ahead of inflation" by 10 percent using the 80/20 rule—priced only those items representing 80 percent of revenue. We used this approach back in early '80s to maintain profitability during high inflation.
  • [There is] absolutely no chance to pass through the rise in costs. Insurance contracts are fixed, and year over year, federal programs cut their reimbursement.
  • Radiology is experiencing a critical shortage of IV [intravenous] contrast used in CT [computerized tomography] exams, angiograms and other interventional procedures. This is related to the shutdown of production facilities in China related to COVID lockdowns on the crazy zero-COVID policy. It makes no sense except that China is pursuing a financial/de-dollarization war by shutting down production and supply lines. We have no control over our fee schedule; margins are slowly but surely eroding, but we are still profitable at this time.

Food Services and Drinking Places

  • I have raised prices twice this year for a total of 8 percent across the board. We are seeing some pushback, and I worry there is little wiggle in increasing prices in 2023; however, if I must, I must.

Personal and Laundry Services

  • In February, we underwent an 18.4 percent increase in all services. This offset our increased costs of doing business, including products and labor pay increases. But with the added employee benefits of health insurance and company-matching retirement plan offered to attract and retain employees, we are still at a net deficit even with the price increase. I do not anticipate another price increase this year, and I would hate to have to increase prices next year. I feel we are at the price ceiling of our target market.

Religious, Grantmaking, Civic, Professional and Similar Organizations

  • We are a trade association, so it’s not applicable to us, but our manufacturing member companies are experiencing significant supply-chain disruptions and delays, and many have now started passing the costs along to their customers (more so than in the past six months).

 

Texas Retail Outlook Survey

Data were collected May 17–25, and 43 Texas retailers responded to the survey.

1. Are you currently experiencing any supply-chain disruptions or delays?

Feb. '21
(percent)
Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Yes 64.4 87.2 80.9 93.0 84.4 83.7
No 35.6 12.8 19.1 7.0 15.6 16.3

NOTE: 43 responses.

1a. How have these supply-chain disruptions or delays changed over the past month?

Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Improved significantly 0.0 0.0 0.0 0.0 2.8
Improved slightly 22.0 23.7 25.0 21.1 36.1
No change 17.1 28.9 30.0 34.2 36.1
Worsened slightly 34.1 15.8 32.5 31.6 19.4
Worsened significantly 26.8 31.6 12.5 13.2 5.6

NOTES: 36 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays.

1b. When do you expect your supply chain to return to normal?

  Jun. '21
(percent)
Sep. '21
(percent)
Nov. '21
(percent)
Feb. '22
(percent)
May '22
(percent)
Less than a month 0.0 0.0 0.0 0.0 0.0
1–3 months 15.4 11.1 2.8 0.0 3.2
4–6 months 41.0 16.7 25.0 25.7 22.6
7–9 months 12.8 16.7 25.0 25.7 16.1
10– 12 months 23.1 22.2 16.7 20.0 22.6
More than a year 7.7 33.3 30.6 28.6 35.5

NOTES: 36 responses. This question was only posed to those currently experiencing any supply-chain disruptions or delays. These calculations exclude respondents that answered “Not sure,” which represented 4.9 percent of responses in June ’21, 5.3 percent in Sep. ’21, 10.0 percent in Nov. ’21, 7.9 percent in Feb ’22 and 13.9 percent in May ’22.

Downloadable chart | Chart data

2. 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)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
None 18.4 26.5 20.4 26.2 14.3 14.0
Some 52.6 53.1 51.0 35.7 34.3 44.2
Most 15.8 10.2 18.4 26.2 40.0 27.9
All 13.2 10.2 10.2 11.9 11.4 14.0

NOTE: 43 responses.

2a. How are you doing this? Please select all that apply.

  May '21
(percent)
Jul. '21
(percent)
Dec. '21
(percent)
May '22
(percent)
Raising prices in 2022 43.6 35.5 76.7 91.7
Raising prices in 2023 * * * 11.1
Offering variable pricing or adding contract contingencies to allow for rising input costs 2.6 12.9 13.3 11.1
Adding a temporary price surcharge 2.6 ** 0.0 5.6
Offering reduced product or service for the same price 10.3 3.2 3.3 2.8
Other 2.6 6.5 0.0 0.0

NOTES: 36 responses. This question was posed only to those passing at least some of the higher costs on to customers. *This answer choice was introduced in the May ’22 survey. **This answer choice was not included in the Jul. ’21 survey.

Special Questions Comments

Motor Vehicle and Parts Dealers

  • The questions about six months from now are hard to answer as everything changes so fast. It is hard to tell what it will be like in two months.
  • The manufacturer has increased prices and we pass that along to the customers.
  • The chip shortage is still our problem with the supply chain.

Building Material and Garden Equipment and Supplies Dealers

  • Supplies were very tight last year. This year is getting better.

 

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

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