Special Questions

Texas Manufacturing Outlook Survey

Data were collected February 10-18, and 78 Texas manufacturers responded to the survey.

NOTE: 77 responses.

NOTES: 78 responses. While respondents were asked to exclude changes in tariff and tax policy, many who responded ‘Yes, negatively on net’ cited tariffs when explaining the changes affecting their firm.

NOTE: 75 responses.

NOTES: 15 responses. This question was only posed to those answering ‘Significant reliance’ or ‘Some reliance’ to question 3.

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 February 10-18, and 237 Texas business executives responded to the survey.

NOTE: 233 responses.

NOTES: 234 responses. While respondents were asked to exclude changes in tariff and tax policy, many who responded ‘Yes, negatively on net’ cited tariffs when explaining the changes affecting their firm.

NOTE: 226 responses.

NOTES: 63 responses. This question was only posed to those answering ‘Significant reliance’ or ‘Some reliance’ to question 3.

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.

• About 20 percent of our employees immigrated legally from another country. We don’t see any negative impact from increased immigration enforcement. I hope to see the U.S. immigration system reformed to a sane and transparent points-based system similar to those in Australia and New Zealand. I’m not optimistic, based on the political objectives of both sides of the aisle.

• Tariffs on Chinese electric vehicles and semiconductors have prompted China to restrict tungsten exports. This resulted in 3x increase in tungsten prices. This is an example of the unintended consequences of bad policy.

• This year has been somewhat odd compared to initial market expectations. The general outlook suggested that the oil market would remain relatively flat compared to 2025, with the possibility of a slight decline. To date, that forecast has not fully materialized for us, although overall performance has been mixed. Certain product segments are experiencing notable growth, while others remain generally consistent with the expected market forecast. From a pricing perspective, we are beginning to see the effects of tariffs reflected in material costs. The impact on our high-volume materials has been manageable due to volume-based pricing advantages. However, we are observing more cost increases on lower-volume items or components with relatively low base costs, where even small increases have a considerable impact.

• The debt load of the largest companies in our industry is a danger to the economy and our industry (commercial printing). Companies can’t sell anything without labels and packaging.

• Our employees work from home, and they are located in five different states.
• Texas’ status as a preferred destination, especially for younger college graduates and skilled workers, has diminished. The low-tax environment in Texas is becoming less of an attraction.

• Immigration policy is impacting many sectors and increasing competition for labor. [It results in] smaller [labor] supplies and companies closing lines of business. Immigration policy overall is a net negative for all.

• While we continue to rely on international employees, we are less able to hire them. There is not a sufficient supply of qualified U.S. citizens to replace them.

• In my 40 years owning and managing restaurants, we have never been able to hire enough employees born in this country. That is just a fact. We comply with the laws as best we are able, but the laws are futile. George W. Bush had a good plan many years ago: Get a simple guest worker plan implemented. For those that came illegally, if they have no criminal record and have worked and supported themselves, also give them a guest worker permit but never citizenship. It’s not the Fed’s role, but why not support something that will support our business and many others? It can’t help but increase GDP, and as a nation we would finally be able to talk about something else.

• As a lifelong resident (born in Dallas), the last 10 years are unprecedented in the rise of cost of living as people move to Texas and Dallas-Fort Worth.

• Texas continues to be a desirable state for people to come to work and live.

• We have strengthened our cybersecurity safeguards and reporting of FinCEN (Financial Crimes Enforcement Network) by partnering with third-party vendors. This aids in avoiding fines and losses, which has come at a significant expense. This expense will be passed along to the consumer via a direct charge payable to the third party and/or an increase in our escrow fee.
• For our consulting engineering services, we recruit nationally and relocate engineers as needed. As a result, we are not dependent on migration of workers into Texas.
• Our company has hired engineers under H-1B visas. The increased cost and tightening requirements for these visas will make it more challenging to retain engineering talent.
• Small companies are having a much harder time hiring qualified people. Large companies are taking in many potential employees. In-migration from other states is also putting pressure on wages and upsetting the existing balance.
• We mostly recruit from the El Paso and Southern New Mexico markets. The salary ranges in these areas are lower than our Dallas-Fort Worth market. It seems to work well having employees in the El Paso and Southern New Mexico area but paying them based on the Dallas-Fort Worth markets.
• Tax changes like cancelling the capitalization of research and development expenses have helped us and lowered our tax burden. We expect demand for the products we sell to increase but supply to be severely constrained, and we don’t know how long this will last.
• Trump Administration policies are excellent and timely for small businesses and U.S.- based companies. Texas’ business-friendly state government, laws and abundant land and energy are excellent for any companies to locate here.
• Texas has an excellent workforce from which to draw.

• We employ many contractors and tradespeople. The vast majority in our service areas hail from Latin America. As roofers, electricians and plumbers disappear, there is no one to take their place. So far, this has been more of an annoyance than a crisis, but it is impacting productivity and costs.

• To be clear, we hire workers from a non-U.S. company only if we are in full compliance with all laws. The current ICE behaviors and the even worse rationales coming from the executive branch are bad for business.

• We have not seen any drop in government regulations to this point. Government regulations continue to be widely unjustified, unprofitable, inefficient and unproductive.

• Our firm has relied exclusively on U.S.-domiciled drivers based in Texas, with a strong emphasis on verified experience, safety history and regulatory compliance.

• Global and international businesses need more flexibility in hiring.
• Thank God we have been able to attract mechanics from California! Amarillo has 2.8 percent unemployment, which makes it difficult to hire local talent.

• No real change noted at this point from the restricted immigration pipeline.