Special Questions

Texas Manufacturing Outlook Survey

Data were collected August 15–23, and 84 Texas manufacturers responded to the survey.

NOTE: 84 responses.

NOTES: 25 responses. This question was only posed to those selecting decreased in question 1.

NOTES: 5 responses. This question was only posed to those selecting increased in question 1.

NOTES: 80 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 50 responses. This question was only posed to those expecting an increase in selling prices this year.

NOTES: 13 responses. This question was only posed to those expecting a decrease in selling prices this year.

NOTE: 83 responses.

NOTES: 64 responses. Prior to August 2023 the question asked about change over the past six months.

Texas Service Sector Outlook Survey

Data were collected August 15–23, and 268 Texas business executives responded to the survey.

NOTE: 262 responses.

NOTES: 56 responses. This question was only posed to those selecting decreased in question 1.

NOTES: 15 responses. This question was only posed to those selecting increased in question 1.

NOTES: 243 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 147 responses. This question was only posed to those expecting an increase in selling prices this year.

NOTES: 16 responses. This question was only posed to those expecting a decrease in selling prices this year.

NOTE: 261 responses.

NOTES: 258 responses. Prior to August 2023 the question asked about change over the past six months.

Texas Retail Outlook Survey

Data were collected August 15–23, and 61 Texas retailers responded to the survey.

NOTE: 59 responses.

NOTES: 17 responses. This question was only posed to those selecting decreased in question 1.

NOTES: 5 responses. This question was only posed to those selecting increased in question 1.

NOTES: 56 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 35 responses. This question was only posed to those expecting an increase in selling prices this year.

NOTES: 11 responses. This question was only posed to those expecting a decrease in selling prices this year.

NOTE: 59 responses.

NOTES: 59 responses. Prior to August 2023 the question asked about change over the past six months.

Special Questions Comments

These comments have been edited for publication.

• Some long-term contract customers are asking for price reductions.

• Customers were willing to accept practically any price increase over the last couple of years. We are starting to see resistance to continued price increases and expect more resistance going forward. We feel forced to increase wages for blue-collar staff in particular, which means that we'll see continued margin compression over the next year.
• Inflation already took place years ago; we are in the process of deflation in the industrial manufacturing business—high deflation. Pricing negotiations, heavy-duty cost cutting, but still high labor costs are placing enormous pressure on profit margins.
• Competition is driving sales prices down while the cost of doing business has increased.

• It is a very competitive market, resulting in companies bidding low prices to keep productivity increased or at the same level.

• Our average wage is up due to increased overtime.

• The consumer will continue to decrease spending across the board but particularly discretionary spending. Basic household items (food and gas) continue to increase. The consumer has held the economy up very well with the interest rate increases over the past two years, but that is coming to an end. We expect to experience two quarters of negative growth over the next 12–18 months.

• The drilling activity increased postpandemic. We're now seeing a significant reduction in drilling activity. Orders are slowing. The backlog we have is sufficient to carry us through this slowdown for a few months, but we aren't backfilling our shipments with new orders as quickly as we would like. Things will rebound, but it may take until January 2024.

• It is harder to cover all cost increases this year due to foreign imports of our products at much cheaper and probably subsidized prices.

• So far with the various price increases we have to implement, there has been little to no pushback. We’ll see what happens on this next run as we have had to give some significant pay increases in the plant over the past few months and will be increasing prices effective Oct 1.

• It is very difficult for us to change our pricing. We have a large, distributed retail network and sell through various channels, so we'd have to communicate an increase to 100’s of stores, etc. We built in a healthy profit margin when we did a price increase in 2021 (our only one in seven years) with the idea that we could withstand higher costs without changing pricing for multiple years.

• The ability of this company to pass on costs is limited to custom products that are difficult if not impossible to find elsewhere in an acceptable time frame. Increases are not accepted by our customers for standard products that we sell. Customers will simply order from Asia—specifically China, India and South Korea where markets are established.

• For a sole proprietor consulting business, the charge rate is dependent upon the job and the level of expertise needed. My costs of providing the services really don't change. Travel expenses (if any) are borne by the client. The charge rate and the number of hours determine the revenue.
• Working baby boomers and business owners are overworked and exhausted with no end in sight. Cultivating replacement is a challenge as the younger workforce is prone to job hopping. Finding and retaining qualified workers is still a huge problem. The U.S. pool of well-trained, experienced workers with good work ethic is shrinking and dwindling fast. Not a good forecast for our country’s global competitiveness.
• Most of our customers are under long-term contracts. Clients review invoices more critically.
• We are having to blend our higher cost on-shore labor prices with lower cost near-shore labor to keep blended rates to clients flat or lower.
• Due to overall inflation, higher interest rates and uncertainty, customers are more sensitive to price increases, which requires a higher level of communication and collaboration.
• China is putting pressure in our prices.
• Our billing rate increases go into effect on Jan. 1. We expect that clients will be less receptive to rate increases for 2024.
• Excessive regulations are driving up input costs and insurance costs, which is translating to real inflation to a much higher extent than what is being told to people.

• As an outpatient imaging provider, we can only be more efficient and hope that patient volumes maintain current levels. We believe volumes are partly impacted by travel plans, both referring physicians and patients, and should improve in September.
• Medical services have fixed pricing. Medicare and Medicaid prices gradually erode lower and commercial prices are overall flat. Downward pressure in prices is relentless.

• As a state university, our primary revenue is tuition and fees, which are under a state freeze for two years. We generate some revenue from campus food services, and those prices will increase slightly to reflect the higher costs.

• We are a staffing agency, and our selling prices are determined by employee wages.

• Customers appear to be more price sensitive. We feel we are now capped at increasing prices.

• Costs are increasing and we are not able to pass the increases along.
• We have been able to pass on some costs due to our competition not being able to deliver and tighter supply for customers.

• We gave employees a 3.5 percent wage increase for cost-of-living adjustment for this year, and we increased selling prices about 4 percent.

• Unfortunately, we are forced to near-shore certain positions in order to retain profitability, due to the dramatic increase in other costs.

• We repair heavy duty trucks and trailers. Our customers are feeling the pinch in reduced freight rates and less freight moving.

• Our reimbursements from the insurance companies are set at the beginning of the year, but drug manufacturers and other suppliers seem to raise costs whenever they can.

• Our business is more challenging currently given the increasing cost of doing business as a result of high interest rates and inflation impacting the affordability of our customers.

• It's harder to pass on costs when fuel is more expensive at the same time.

• We had price increases at the beginning of the second quarter, and we do not plan to raise prices for at least six months, so long as there is no sudden markup and we are forced to.
• People don't need to eat out. If prices go up too fast, customers will eat out less. They will cook at home.  It is already happening.