Special Questions

Texas Manufacturing Outlook Survey

Data were collected November 13–21 and 88 Texas manufacturers responded to the survey.

NOTES: 88 responses. In Feb. '23 the question asked about 2023 versus 2022.

NOTES: 34 responses. This question was only posed to firms reporting an expected increase in question 1.

NOTES: 28 responses. This question was only posed to firms reporting an expected decrease in question 1.

NOTE: 87 responses.

NOTE: 87 responses.

Texas Service Sector Outlook Survey

Data were collected November 13–21 and 277 Texas business executives responded to the survey.

NOTES: 274 responses. In Feb. '23 the question asked about 2023 versus 2022.

NOTES: 101 responses. This question was only posed to firms reporting an expected increase in question 1.

NOTES: 75 responses. This question was only posed to firms reporting an expected decrease in question 1.

NOTE: 272 responses.

NOTE: 272 responses.

Texas Retail Outlook Survey

Data were collected November 13–21 and 57 Texas retailers responded to the survey.

NOTES: 57 responses. In Feb. '23 the question asked about 2023 versus 2022.

NOTES: 19 responses. This question was only posed to firms reporting an expected increase in question 1.

NOTES: 18 responses. This question was only posed to firms reporting an expected decrease in question 1.

NOTE: 57 responses.

NOTE: 57 responses.

Special Questions Comments

These comments have been edited for publication.

• Fortunately, our business has no debt, with previous capital expenditures for automated equipment self-funding from cash flow. Employee numbers have dropped, and the worker profile has shifted to the most-talented employees directly performing the work. A layer of people has been removed to better match demand, and our service offerings have lessened in scope. Automated machinery is balancing productivity—less workers matched to less demand—so productivity per person works, but overall capacity and total dollar profitability are greatly diminished but sustainable.

• Projecting next year, 2024, at this time is a crapshoot. Consumers have record credit card debt and increasing delinquencies in credit card and autos, yet it appears they continue to spend. I see consumer spending slowing down after the Christmas holiday, with a possible recession midyear.

• Costs are increasing, and DFW, while a growth area in construction, has not increased pricing for specialty or subcontractors.

• The inflation tax will continue to erode our ability to produce at a profitable level.
• We're doing more with less, and fewer people are doing it. Through the year, we have increased efficiency with better space utilization and consolidated purchasing. Our threshold for pain has evidently increased as none of these steps are easy, but they are necessary. The good news is we remain profitable.
• We cannot control business cycles, but we can diversify into enough segments that we can focus on those that are busy.

• If forecasts are correct, the general climate will improve late second quarter or early third quarter [next year]. We expect it will, and retail will improve. We are at the front end of investments retailers will make.

• We are about to implement another price increase to cover increased wages and costs in general. Hopefully, there will not be any pushback on this upcoming price increase.

• Maintaining a reasonable profit margin has been elusive in 2023. Rising costs of ancillary items used in repair of machinery and plant/office infrastructure maintenance have increased faster than we are able to raise prices. Raw material pricing (metals) has remained fairly flat with some spikes in pricing for steel and brass.

• Inflation is real, and we feel government spending is out of control and contributing to inflation.

• Margins have been difficult to make due to increases in cost, primarily in wages and benefits expense.

• Nursing homes can't control what they charge for services; this is determined by insurance companies—namely Medicare and Medicaid. The cost of providing services (according to an analysis of all national cost reports) at nursing homes exceeds the revenue received. For the industry, net income is negative. Our pain point is that, due to inflation, everything costs more than it did six months or a year ago. Labor, medical supplies, pharmacy, food, utilities, etc., every expense in our business is costing more while the revenue does not increase, and in some cases decreases due to insurance denials and cuts.

• We're cutting expenses as much as we can, including wages, to have some profitability. We are also increasing business development activities that don't require investment and utilizing our automation tools to hopefully drive inbound leads and business.

• We are on a profit improvement plan. We have adjusted head count to align with lower revenue levels.
• We're expecting a slowdown in new construction projects for the first part of 2024.
• The economy is slowing down a lot in the U.S. and in overseas markets.
• We've made investments in training new team members and that has increased expenses ahead of revenue. We expect the new team to be contributing to revenue in first quarter next year.

• Increasing consumer debt will affect durable goods consumption over the next 12 to 24 months, but discretionary consumer goods and entertainment will slightly increase at the same time.

• Our earnings before taxes are utter nonsense.

• Concerns are high due to the uncertainty in the economy. Budgets are being slashed at client companies while the cost of doing business continues to increase.

• We intend to increase our maintenance load in response to rising revenue, with a likely decrease in earnings before interest and taxes.

• I’m optimistically hoping that the first quarter of 2024 will truly be better in terms of activity and rates, and we can move back into profitability.

• Owners need our brand of services more than ever, but they are challenged to come up with the money to pay us.

• If business operations do not improve soon, we will have to start making employment cutbacks to lower the cost of labor.

• Management is taking a proactive approach to increase prices due to the rising cost of goods sold to avoid shrinking margins.

• General construction looks like the downward turn will be here for a while.

• Expenses are increasing at a more-than-substantial rate. We can’t increase prices for our products to offset it.

• It's hard to predict if people will return to restaurants in the next six months. However, as proven by the pandemic, eating out has become more essential, so it's not a matter of if but when people will return to the restaurants.

• We are increasing product prices rather than artificially holding them down for the cost of goods to come down.
• January and February are generally slower months, so it will be tough to show a profit without cutting labor hours, which we always struggle with, because we need the staff for when it does pick up. It will be a balance.