Special Questions

Texas Manufacturing Outlook Survey

Data were collected October 17–25 and 91 Texas manufacturers responded to the survey.

NOTE: 91 responses.

NOTE: 91 responses.

NOTE: 90 responses.

NOTE: 89 responses.

NOTES: 89 responses.

NOTE: 90 responses.

Texas Service Sector Outlook Survey

Data were collected October 17–25 and 279 Texas business executives responded to the survey.

NOTE: 277 responses.

NOTE: 275 responses.

NOTE: 275 responses.

NOTE: 271 responses.

NOTES: 274 responses.

NOTE: 271 responses.

Texas Retail Outlook Survey

Data were collected October 17–25 and 53 Texas retailers responded to the survey.

NOTE: 52 responses.

NOTE: 52 responses.

NOTE: 52 responses.

NOTE: 50 responses.

NOTES: 51 responses.

NOTE: 50 responses.

Special Questions Comments

These comments have been edited for publication.

• We are having difficulty in many of these areas, but not due to obtaining credit. The supply side of talent is dwindling, driving increased salary requirements for qualified talent to historic levels, far above any inflation reported. Unfortunately, this does not match what products can be sold for as we experience stagnation or diminishing orders without lowering prices. In short, our costs are going up for labor, counter to our diminishing margins on products sold.

• We recently purchased a new building and were able to get a good rate on a commercial mortgage from our existing bank. We saw a wide range in pricing across different banks. It certainly looks like banks are tightening credit standards and raising prices. Creditworthy borrowers won't have any problems getting credit, albeit at higher rates than last year, but riskier borrowers are going to get frozen out of the credit markets.

• We are paying employees for 40 hours to keep them although we do not have the work to keep them busy.

• We have not had difficulty obtaining credit, but the interest rate is obviously a lot higher. Our working capital line of credit has increased from 6 percent initially to close to 11 percent today.
• We have not sought any new borrowing this year. We had a line of credit renewed in the first quarter of the year and requested and received an increase. Next year, 2024, I anticipate we will need to borrow for planned capital expenditures. We can only hope the bank is in an agreeable mood.

• We are paying off our debt as fast as possible. Currently, we have plenty of business to pay our debt off and start working on our own capital.
• We still have problems finding raw material and [then there are] the high prices.
• Now is not the time to have debt.

• Credit for us is available. Orders are harder to get. It is very competitive.

• Soft-goods home furnishing production continues to decrease in demand. It is down 70 percent from this time last year.
• We do not have any debt; we are 100 percent owner/privately funded.

• No difficulty in obtaining credit, but this company is not willing to use credit due to expected difficulty in paying [the debt] back at the high interest rates.
• The credit issue affects our customers and then us.

• I currently have credit lines sufficient to meet any needs I have over the next six to 12 months.

• We haven't sought credit as no one will loan nursing homes any money for operations, only for buying or selling the building. Every cost is rising in our business except for the government funded insurance payments (state Medicaid and federal Medicare, which is 95 percent of our revenues) for the residents that we care for. The future for skilled nursing facilities, home health, hospice and other post-acute-care providers does not look good.

• Finding and retaining skilled professionals is still highly competitive with no downturn expected.
• We don't have employees. We hire subcontractors when we develop real estate. That said, we have shelved our current development project and will not be building it. None of those subs will be hired. In that sense, yes, it has reduced employment.

• The market of investors is telling us that profit is more important now, so we did a layoff to become more profitable a few months back, and it has worked.
• Interest rates are too high for business borrowing from any source. The government needs to reduce spending to help reduce interest rates overall. Let the private sector borrow and grow the economy.
• Our biggest issue is that a number of our clients are being affected by higher borrowing costs that are crippling their cash flow. We have a number of clients in the process of filing for bankruptcy.
• Credit has not been an issue affecting government clients so far. We are seeing small construction companies struggling with labor shortages and poor performance resulting in costly remediations.
• Our firm has sufficient access to capital. The interest rate/credit environment is having an impact on private sector projects that may not move forward in current conditions. This will provide some headwinds to some of our offices. Overall, our outlook remains favorable because of the balance of our public versus private mix of clients.

• Fortunately, we are a debt-free company that uses profits to expand and purchase equipment. However, if credit is needed, I won't expect difficulty securing a loan.
• We do our best not to rely on business credit exactly for times like these.

• Financing is not an issue; finding qualified people still is.
• The service side of our apartment business requires little to no credit. We are also keen to purchase multifamily assets but are seeing a lot of fear in lenders’ eyes. On the other hand, we know what we are doing and only present deals that are financially solid, so lenders are calling us looking for action.

• We just refinanced all of our debt ($500 million) with multiple term sheets and favorable advance rates, but the cost of funding was materially higher because of the rise in rates and widening of spreads. So credit is available, just much more expensive. This in turn is forcing us to raise prices to customers.

• We have not sought credit, but seeking investment has been difficult in this environment.

• The cost of capital and general global uncertainly next year may make needed cash or an IPO [initial public offering] harder to do and at a higher cost.

• Along with increased construction costs, the cost of debt is impacting us in a negative manner. The Fed continuing to increase rates may cause growth to stop.
• We are optimistic that we will be able to secure credit to purchase additional trucks to re-open operations in Houston, a much busier market area.

• We accumulated cash through the pandemic and haven't seen anything in this screwed up world and country to make me think we ought to stop. So we have no debt.

• The holidays are coming, so I will need additional help. But if business doesn't pick up until the few days before the big holiday, then hiring people and giving them hours will be tough. But if we don't hire and get prepared then we are giving bad service, and that could leave a bad taste with potential long-term customers.

• Sales have been significantly impacted by consumers’ ability to obtain or afford financing.

• We established a new banking relationship in October 2022, and we're in the process of renewing a solid line of credit. Thankfully, we're not trying to go through the new-relationship process this year, because I believe there are headwinds for lending to new customers.
• As a small retail business and commodity business that has been in business over 30 years, we have substantial reserves in cash and real estate equity that help with short-term financing. However, in the commodity side of the business, I do believe many businesses are suffering from credit issues.

• Extremely high and unsupportable construction costs, combined with tight credit that, if secured, is at decade highs, have finally brought our expansion plans, new cafe openings, to a halt. We are at full pause now and will wait out 2024.

• We have had to use family funds for the business, which is cheaper and easier.