Surveys

Special Questions

December 29, 2025

Special Questions

For this month’s survey, Texas business executives were asked supplemental questions on wages, prices, outlook concerns and artificial intelligence. 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 Dec. 15-23 and 300 Texas business executives responded to the surveys.

1a. What percent change in wages, input prices and selling prices did your firm experience over the past 12 months?

Wage and price growth has slowed after the acceleration seen in the September data. Texas firms surveyed report wage growth of 3.5 percent over the past 12 months, on average, 4.0 percent growth in input prices and 2.3 percent growth in selling prices. The deceleration was broad based across the manufacturing, services and retail sectors.

1b. What percent change in wages, input prices and selling prices do you expect over the next 12 months?

Wage and price growth expectations eased somewhat in December. Texas firms surveyed expect wages to increase 3.3 percent over the next 12 months, on average. They expect input prices to increase 3.4 percent and selling prices to increase 2.5 percent.

Chart 1a — Downloadable chart Chart data

2. What are the primary concerns around your firm's outlook over the next six months, if any? Please select up to three.

Demand remains the top outlook concern among Texas firms surveyed, followed by inflation and domestic policy uncertainty. The shares of firms citing labor shortages and labor costs fell notably in December.

For the next question, respondents were provided the following definitions: Traditional AI relies on explicit programming to execute specific tasks. Examples include search algorithms and recommendations or predictions based on past trends. These AIs have been trained to follow given rules and perform tasks, but they don’t create anything new. Generative AI is distinct from traditional AI in that it autonomously generates new content. Examples include written content creation like ChatGPT, question answering like sales or customer service chatbots, and enhanced code and software development.

3. Is your firm currently using AI?

Two-thirds of responding firms report they are currently using AI, up from 59 percent in May and 38 percent in April 2024.

3a. On net, how has the use of AI affected employment at your firm?

Among firms using AI, most report it has not impacted their need for workers. Three percent say it increased their need for workers and 8 percent say it decreased their need for workers.

Chart 3a — Downloadable chart Chart data

3b. Please indicate the change in employment by skill level due to the use of AI.

Among firms noting an employment effect from the use of AI, the most widespread impact is to mid-skill workers. Still, there was not a consensus in the direction—a third noted a decrease, while about 20 percent noted an increase. Respondents were mixed on the impact to high-skill workers as well. For low-skill workers the direction of impact was clearer—nearly thirty percent of firms reported a decrease in employment in those positions, while very few reported an increase.

	Increased (percent)	No change (percent)	Decreased (percent)	Don’t know (percent)
Low-skill positions (typically require high school diploma or less)	2.6	60.5	28.9	7.9
Mid-skill positions (typically require some college or technical training)	20.5	38.5	33.3	7.7
High-skill positions (typically require college degree or higher)	26.3	55.3	15.8	2.6

NOTES: 39 responses. This question was only posed to those noting a change in employment due to the use of AI.

3c. Please indicate the change in employment by work experience due to the use of AI.

Among firms noting an employment effect from the use of AI, the most widespread impact is to employment among workers with little to no work experience, as nearly 30 percent of firms reported a decrease.

	Increased (percent)	No change (percent)	Decreased (percent)	Don’t know (percent)
Little to no work experience	7.3	46.3	29.3	17.1
5 to 10 years of work experience	15.0	52.5	25.0	7.5
More than 10 years of work experience	15.0	65.0	12.5	7.5

NOTES: 41 responses. This question was only posed to those noting a change in employment due to the use of AI.

3d. On net, how do you expect the use of AI to affect employment at your firm over the next few years?

Among AI-using firms, a quarter expect AI to decrease their need for workers in the medium term. Thirty percent expect AI to change the type of workers they need but not the number. The employment impact is expected to be more widespread in the manufacturing sector than in services, where more firms are uncertain about the future employment effect.

Chart 3d — Downloadable chart Chart data

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Texas Manufacturing Outlook Survey

Data were collected Dec. 15-23 and 69 Texas business executives responded to the surveys.

1. What percent change in wages, input prices and selling prices did your firm experience over the past 12 months, and what do you expect over the next 12 months?

	Mar. '25 (percent)		Jun. '25 (percent)		Sep. '25 (percent)		Dec. '25 (percent)
	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months
Wages	3.6	3.2	3.3	3.1	3.8	3.2	3.4	3.3
Input prices (excluding wages)	4.5	4.9	5.5	4.5	5.8	4.2	5.5	4.1
Selling prices	2.0	3.8	3.0	3.7	3.8	3.8	2.7	2.7

NOTES: 66 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

2. What are the primary concerns around your firm’s outlook over the next six months, if any? Please select up to three.

	Sep. '24 (percent)	Dec. '24 (percent)	Mar. '25 (percent)	Jun. '25 (percent)	Sep. '25 (percent)	Dec. '25 (percent)
Level of demand/potential recession	63.2	37.5	50.0	47.9	50.0	53.6
Input costs/inflation	28.9	37.5	43.8	45.2	45.5	46.4
Domestic policy uncertainty	56.6	45.0	40.0	27.4	40.9	39.1
Geopolitical uncertainty	27.6	35.0	30.0	43.8	31.8	30.4
Labor shortages/difficulty hiring	14.5	22.5	18.8	17.8	22.7	18.8
Supply-chain disruptions	19.7	20.0	17.5	30.1	19.7	17.4
Labor costs	26.3	25.0	15.0	13.7	27.3	17.4
Cost of credit/interest rates	13.2	13.8	10.0	13.7	10.6	13.0
Taxes and regulation	31.6	16.3	23.8	23.3	12.1	11.6
Other	1.3	8.8	15.0	11.0	7.6	7.2
None	0.0	2.5	2.5	0.0	1.5	2.9

NOTES: 69 responses.

3. Is your firm currently using AI?

	Apr. '24 (percent)	May '25 (percent)	Dec. '25 (percent)
Yes, traditional AI	8.2	20.8	18.8
Yes, generative AI	3.5	10.4	2.9
Yes, both traditional and generative AI	10.6	14.3	21.7
Yes, but don’t know which type	5.9	3.9	11.6
No, but planning to do so in the next 12 months	15.3	20.8	18.8
No, and we have no plans to do so in the near future	47.1	24.7	23.2
Don’t know	9.4	5.2	2.9

NOTES: 69 responses.

3a. On net, how has the use of AI affected employment at your firm?

	Dec. '25 (percent)
Increased our need for workers	2.6
Decreased our need for workers	7.9
Changed the type of workers we need but not the number	7.9
Has not impacted our need for workers	78.9
Don’t know	2.6

NOTES: 38 responses. This question was only posed to those currently using AI.

3b. On net, how do you expect the use of AI to affect employment at your firm over the next few years?

	Dec. '25 (percent)
Increase our need for workers	5.3
Decrease our need for workers	31.6
Change the type of workers we need but not the number	34.2
Will not impact our need for workers	26.3
Don’t know	2.6

NOTES: 38 responses. This question was only posed to those currently using AI.

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Texas Service Sector Outlook Survey

Data were collected Dec. 15-23 and 231 Texas business executives responded to the surveys.

1. What percent change in wages, input prices and selling prices did your firm experience over the past 12 months, and what do you expect over the next 12 months?

	Mar. '25 (percent)		Jun. '25 (percent)		Sep. '25 (percent)		Dec. '25 (percent)
	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months
Wages	3.8	3.5	3.8	3.2	3.8	3.4	3.6	3.3
Input prices (excluding wages)	4.0	4.1	3.8	3.6	4.2	3.7	3.7	3.1
Selling prices	2.7	2.9	2.3	2.5	2.4	2.8	2.2	2.4

NOTES: 200 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

2. What are the primary concerns around your firm’s outlook over the next six months, if any? Please select up to three.

	Sep. '24 (percent)	Dec. '24 (percent)	Mar. '25 (percent)	Jun. '25 (percent)	Sep. '25 (percent)	Dec. '25 (percent)
Level of demand/potential recession	42.6	32.5	50.0	44.6	49.6	49.8
Domestic policy uncertainty	46.8	33.3	46.2	39.6	37.0	42.2
Input costs/inflation	27.2	34.5	33.1	29.2	35.3	39.9
Geopolitical uncertainty	20.9	21.8	26.3	40.4	25.6	24.2
Cost of credit/interest rates	21.3	24.6	19.9	25.4	19.7	21.1
Labor costs	29.8	30.2	19.1	19.6	24.4	18.8
Labor shortages/difficulty hiring	23.4	25.0	18.2	19.2	22.7	18.4
Taxes and regulation	29.4	25.0	19.5	18.3	17.6	18.4
Supply-chain disruptions	7.2	9.5	15.3	12.5	9.2	7.2
Other	2.6	6.0	6.8	7.1	7.1	6.7
None	3.4	2.4	1.7	1.7	3.4	2.7

NOTES: 233 responses.

3. Is your firm currently using AI?

	Apr. '24 (percent)	May '25 (percent)	Dec. '25 (percent)
Yes, traditional AI	13.9	15.8	22.5
Yes, generative AI	6.2	12.4	8.6
Yes, both traditional and generative AI	15.0	27.0	30.6
Yes, but don’t know which type	6.2	7.1	7.7
No, but planning to do so in the next 12 months	16.8	18.7	18.0
No, and we have no plans to do so in the near future	34.1	16.2	10.8
Don’t know	7.7	2.9	1.8

NOTES: 222 responses.

3a. On net, how has the use of AI affected employment at your firm?

	Dec. '25 (percent)
Increased our need for workers	2.6
Decreased our need for workers	8.5
Changed the type of workers we need but not the number	11.1
Has not impacted our need for workers	75.2
Don’t know	2.6

NOTES: 153 responses. This question was only posed to those currently using AI.

3b. On net, how do you expect the use of AI to affect employment at your firm over the next few years?

	Dec. '25 (percent)
Increase our need for workers	2.6
Decrease our need for workers	23.4
Change the type of workers we need but not the number	28.6
Will not impact our need for workers	31.2
Don’t know	14.3

NOTES: 154 responses. This question was only posed to those currently using AI.

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Texas Retail Outlook Survey

Data were collected Dec. 15-23 and 41 Texas business executives responded to the surveys.

1. What percent change in wages, input prices and selling prices did your firm experience over the past 12 months, and what do you expect over the next 12 months?

	Mar. '25 (percent)		Jun. '25 (percent)		Sep. '25 (percent)		Dec. '25 (percent)
	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months	Past 12 months	Next 12 months
Wages	3.7	3.4	3.3	2.7	4.2	3.2	3.1	2.3
Input prices (excluding wages)	4.1	4.7	4.6	4.8	4.4	4.6	3.8	3.5
Selling prices	3.1	3.9	2.9	3.7	3.3	3.7	2.9	3.1

NOTES: 35 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

2. What are the primary concerns around your firm’s outlook over the next six months, if any? Please select up to three.

	Sep. '24 (percent)	Dec. '24 (percent)	Mar. '25 (percent)	Jun. '25 (percent)	Sep. '25 (percent)	Dec. '25 (percent)
Level of demand/potential recession	48.1	42.6	43.6	42.1	47.7	53.8
Input costs/inflation	26.9	38.3	46.2	39.5	43.2	43.6
Domestic policy uncertainty	42.3	31.9	33.3	34.2	25.0	33.3
Supply-chain disruptions	13.5	17.0	25.6	28.9	20.5	23.1
Geopolitical uncertainty	19.2	25.5	23.1	55.3	34.1	20.5
Taxes and regulation	26.9	14.9	17.9	7.9	20.5	20.5
Labor shortages/difficulty hiring	25.0	27.7	23.1	15.8	25.0	17.9
Labor costs	23.1	21.3	15.4	21.1	31.8	15.4
Cost of credit/interest rates	26.9	25.5	17.9	21.1	13.6	12.8
Other	0.0	6.4	5.1	10.5	4.5	7.7
None	3.8	2.1	2.6	0.0	2.3	0.0

NOTES: 39 responses.

3. Is your firm currently using AI?

	Apr. '24 (percent)	May '25 (percent)	Dec. '25 (percent)
Yes, traditional AI	13.7	13.6	13.2
Yes, generative AI	7.8	6.8	2.6
Yes, both traditional and generative AI	9.8	20.5	23.7
Yes, but don’t know which type	2.0	4.5	18.4
No, but planning to do so in the next 12 months	13.7	25.0	26.3
No, and we have no plans to do so in the near future	47.1	22.7	13.2
Don’t know	5.9	6.8	2.6

NOTES: 38 responses.

3a. On net, how has the use of AI affected employment at your firm?

	Dec. '25 (percent)
Increased our need for workers	4.5
Decreased our need for workers	4.5
Changed the type of workers we need but not the number	13.6
Has not impacted our need for workers	72.7
Don’t know	4.5

NOTES: 22 responses. This question was only posed to those currently using AI.

3b. On net, how do you expect the use of AI to affect employment at your firm over the next few years?

	Dec. '25 (percent)
Increase our need for workers	4.5
Decrease our need for workers	9.1
Change the type of workers we need but not the number	31.8
Will not impact our need for workers	31.8
Don’t know	22.7

NOTES: 22 responses. This question was only posed to those currently using AI.

Survey respondents were given the opportunity to also provide comments, which can be found in the Comments tab above.

Special Questions Comments

Survey participants are given the opportunity to submit comments. Some comments have been edited for grammar and clarity.

Texas Manufacturing Outlook Survey

Chemical manufacturing

AI (artificial intelligence) is primarily used in training and assisting roles, and it still seems more than 12 months off before we see major impacts to employment in the manufacturing arena.

Computer and electronic product manufacturing

We use AI mostly for marketing purposes.
As we grow, we hope to offset workforce size with AI. But many workers are manual labor and can’t be offset by AI or robots in our field.
Artificial intelligence raises efficiency in our business. It does not eliminate employment or the need of hiring new talent.

Machinery manufacturing

We are going to use equipment that can be programmed to run without people. Robots are a major component to our thinking.
Smart workers are using AI to get beyond basic “write an email response to…” and becoming more strategic in how they utilize the tool. Workers that simply don’t know the right questions to ask or see how different topics fit together will become obsolete. It’s an exciting time to see who steps up and how they do it!

Texas Service Sector Outlook Survey

Administrative and support services

The regulations around data, privacy and personal identity information make using AI difficult. At this point the outcomes from AI are not consistently good enough to overcome the barriers. That will change, but I’m not sure when.

Ambulatory health care services

As a direct service provider, AI is an augmentation to the staff rather than a replacement.

Credit intermediation and related activities

AI comes in many forms, and many vendors have utilized AI for some time in their product delivery, especially monitoring for fraud and cybersecurity. For regulatory compliance, based on volume of requirements, AI provides an enhanced method of monitoring large numbers of transactions. We are just beginning to see the multifaceted potential of AI.

Insurance carriers and related activities

We’re using AI to streamline procedures and processes as well as financial trends. In a sales business, we don’t see AI replacing our people anytime soon.

Professional, scientific and technical services

Using generative AI (ChatGPT in our case), we are solving software programming and support issues faster, improving our productivity a lot. So customers are happy and buying more of our software products and support services. Our revenue is getting better with more profit. With this extra money we can now hire more new employees than we would without the use of AI. AI adoption will increase employment for small companies like us.
We are testing AI capabilities but have found mixed results. On the surface, the AI responses are quick and look impressive, but upon deeper read, we have found some of its answers to be incorrect or misguided. The notion that it will replace expertise is maybe inflated, at least for now. It is a big time and money investment for small firms who cannot afford the expenditure to explore functionality, accuracy and benefits.
AI is changing job requirements and daily activities. We need to teach entry-level employees how to use AI so that they can be hired again.
We will need more AI expertise, so that is additional help. Perhaps it will be offset by more conservatism in hiring or replacing certain jobs.
Mostly AI is making us more productive. Knowledge workers must be expert users of AI or be unemployed. Within five years they might be unemployed regardless. Robots are much harder than LLMs [large language models].
As our software becomes more automated, I don’t think we’ll need as many structural engineers.
We will need fewer workers to do the same tasks, but there will be more tasks. We expect overall employment to remain steady.

Real estate

Those who sit in front of a computer screen all day are most at risk. Skilled, manual labor will become increasingly valuable.

Rental and leasing services

Neither type of AI is going to put a wrench on a broken machine and turn it to the right. I think AI may one day soon improve our ability and efficiency anticipating customers’ needs and timing for purchases, but we are not quite there yet.
Our business is physical in nature with lots of different variables at every job site. So while we can use AI to displace a ton of white-collar work, we can also empower our non-college workforce with a built-in coach anytime they need to do something new. They often use AI to troubleshoot using photos and videos from the field. I don’t see AI disrupting the physical work our technicians do, nor do I see it displacing the human-to-human sales relationships in our industry. But I do see it drastically reducing our need to hire humans in the fields of marketing, accounting, legal, human resources, training and development, etc.

Securities, commodity contracts and other financial investments and related activities

We won’t see the full impact of AI on the workforce for five to 10 years. There will most certainly be a dramatic shift in the demand for types of workers needed, with low-skill positions disappearing, trade skills increasing dramatically, and high-skill positions increasing specifically for overall management of AI for various verticals. Fragmentation is already appearing and will accelerate.

Support activities for transportation

It has been such a devastatingly rotten four years for American trucking that I can’t even forecast at this point. Ask me again after the first of the year.

Truck transportation

I am not sure how impactful AI will be, as we are just getting into it and so many of our employees are actual laborers who do the manual labor. Hopefully we will use AI more in sales, customer service and office operations.
We use AI to get quick instructions on the steps to repair semi trucks.

Utilities

I do not believe that AI is at the level that it needs to be. Everyone’s expectations are higher than what AI can deliver.

Texas Retail Outlook Survey

Merchant wholesalers, nondurable goods

AI will help us perform tasks more efficiently. While it’s still too early to predict, it’s possible we could put off hiring new workers, if the efficiencies allow us to handle more business with current staffing levels.

Motor vehicle and parts dealers

AI has been a success replacing workers that perform customer sales follow-up and service recall or maintenance communication. It is not replacing mechanics or salespeople.
Our AI use is very limited, but we have an aggressive plan to do so.
AI has become the catch phrase that every company feels the need to use, but the reality is that many of them who are talking about it are not really utilizing AI.

Nonstore retailers

Our AI use is indirect. Our dashcams and advertisers and software providers use it.

Questions regarding the Texas Business Outlook Surveys can be addressed to Isabel Brizuela..