Special Questions

Texas Manufacturing Outlook Survey

Data were collected December 12–20 and 92 Texas manufacturers responded to the survey.

NOTES: 83 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 90 responses. "Domestic policy uncertainty" was added in December 2023.

NOTE: 90 responses.

Texas Service Sector Outlook Survey

Data were collected December 12–20 and 273 Texas business executives responded to the survey.

NOTES: 234 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 261 responses. "Domestic policy uncertainty" was added in December 2023.

NOTE: 260 responses.

Texas Retail Outlook Survey

Data were collected December 12–20 and 58 Texas retailers responded to the survey.

NOTES: 50 responses. Averages are calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 55 responses. "Domestic policy uncertainty" was added in December 2023.

NOTE: 55 responses.

Special Questions Comments

These comments have been edited for publication.

• We may have to cut our workforce even further, which is not good for manufacturing at this time.

• The geopolitical condition in the U.S. and worldwide is of great concern. It would only take one of these matters to explode into a worldwide event, leading to major disruptions.

• The fact that there are at least four issues that we feel are impacting our six-month view is disconcerting. That's a lot to handle and balance.
• Politics, inflation, and finding and holding our best people are the major concerns we have. Our competitors are now buying products from us because we vertically integrated our business over the past several years when they didn’t.

• Attrition has put our workforce at a level lower than desired. We are hiring to replace only those lost.
• We will have to hire if there is an uptick in business.

• The value received from the labor market is in question. It seems like the productivity of labor is decreasing.
• War is a great way to stay in political power. We pray that this does not occur; however, we do not have faith in the present situation.

• The availability of a qualified workforce is still a problem for us. We are not responding to potential contracts because we do not have enough qualified and experienced employees to staff projects.
• It is hard to hire experienced engineers. New college graduates seem to be more plentiful. Our price and salary volatility is decreasing, though. We are more confident in our ability to budget our costs for 2024 than we have been in the last couple of years.
• We do our best to carry our employees through bad times and not have layoffs. So far, we have been able to do that and do not think layoffs will happen.
• In 2024 we hope to grow our business 20 percent and increase staff 1.5 percent.
• We have been totally working from home since March 2021, so we hire nationwide. Sales are stagnant, and our clients are the same.
• We are a recurring revenue business that loses clients due to mergers and acquisitions, primarily, which have been more than usual in 2023.
• We think U.S. government domestic and foreign policy missteps are big reasons for U.S. and global slowdown.
• We believe we will see a slight uptick in activity that will drive staffing increases. There is a lag in our pricing increases relative to input prices to account for annualized (year-end) pricing adjustments.

• Inflation is affecting all input prices; however, it has been a delayed effect, as interest rate increases have not seemed to stem these increases. Salaries and wages are also at a dangerously elevated level, which is not sustainable in the long term.
• If this downturn continues, we will implement layoff plans of up to 5 percent of our workforce.
• We are hopeful that business volume will pick back up in the third or fourth quarter of 2024.

• We increased wages in 2023 only for new hires due to the tight labor market and did not affect wages of continuing employees. We will increase wages in 2024 for continuing employees effective Jan. 1.

• Although we are looking for additional employees, we are taking our time. It is more important to get the right person than to get a person. There are not enough qualified candidates out there right now.

• Commercial banking is being challenged by rising interest rates, which has significantly slowed loan demand while deposit customers and competing investment brokers are driving up our deposit costs. The new impact is a narrowing net interest margin, or a narrowed gross income spread. This challenge has been most evident as commercial banks try to manage their spreads, with mistakes made by some banks that chose to make longer-term investments when interest rates were low.

• We are hiring, but we cannot find technicians to work on heavy equipment, and we cannot find salespeople to sell heavy equipment.

• Worker demands are easing, and we have what we need, except for qualified and skilled maintenance personnel—we can’t get enough of these at any price.
• We think national elections are the big wild card. We think the first half of 2024 will be solid, and the second half will have people being very cautious until early 2025.

• Our industry, residential mortgage lending, is down 90 percent from three years ago, and we are quite pessimistic about 2024.  

• We think political uncertainty in the U.S. weighs heavily on business leaders’ minds right now. However, on the positive side, the Federal Reserve signaling that tightening of monetary policy may be coming to an end is constructive.

• A lack of qualified, reliable candidates is making our business difficult to operate.

• We were overstaffed by about 15 percent. Instead of dragging out those adjustments, we put a plan in place and trimmed the workforce all on one Friday afternoon. And then we let the remaining team know that we wanted to rip off the Band-Aid, and we do not anticipate having to do that again.

• In a perfect world, we would lay off workers or reduce labor expense, but our skill set needs are difficult to hire and train, so we are opting to stand firm with our current labor force. 

• Our federal representatives and senators must start working together. The business community is looking for stability not radical headlines. Congress must address the U.S. budget situation in a nonpartisan manner without a federal government shutdown.