Special Questions

Texas Manufacturing Outlook Survey

Data were collected March 17–25, and 78 Texas manufacturers responded to the survey.

NOTES: 70 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 75 responses.

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 March 17–25, and 237 Texas business executives responded to the survey.

NOTES: 196 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTES: 225 responses.

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.

• It is impossible to forecast what is going to happen because of our erratic foreign policy. I am highly concerned about long-lasting energy disruptions or worse. The cost of the war in Iran is also concerning at a time when one of my largest fears is the size of our debt and deficit.

• Oil and gas pricing will be a significant impact on raw material inputs.

• We expect to see higher input costs due to the increased cost of diesel fuel. Our bigger concern is an unpredictable supply-chain disruption for raw materials due to events in the Middle East. We don’t expect to see a significant drop in demand, but this could change if high oil prices persist and the economy goes into a recession and companies reduce research and development spending as a way to conserve cash.

• Domestic and international policy are major concerns.

• More trade and fewer wars, please.
• Tariffs and the renegotiation of the USMCA [are issues of concern].

• We’re a direct-to-consumer business in private-pay healthcare with a primarily elderly audience. Our customers tend to show economic stress first, and we’re seeing those signs in our purchases.

• War disruption is causing an unstable situation.

• It is difficult to raise prices in a stagnant market, but the increases in costs just keep coming.

• Wages are decreasing due to variable compensation decreasing—jobs are not closing, therefore recruiters are not earning commissions. Compensation plans are tightened for 2026 because of the uncertainty. We are trying not to lay off recruiters. Input prices are going up primarily due to technology costs increasing.

• The economic environment is somewhat unstable, creating negative sentiment for businesses and consumers.

• It feels like things are picking up a bit, although the Iran situation put a halt on new activity. It seems that if [interest] rates came down a bit we would see investment start to pick up.
• Labor and input costs continue to increase, but we have little to no elasticity to increase our selling prices to customers. Customer traffic remains flat. It is hard to raise prices. Weak back-to-office [is a concern] and business travel remains depressed.

• Labor shortages continue in the architectural field, and wage pressures are increasing rapidly. Wage demands are not based on the local market but on averages of salary postings on a nationwide scale. This presents a real challenge on small market employers’ operating margins.
• We see early warning signs in this cycle that infrastructure demand is being pulled up to the first half of the year, as we’re seeing more irregular and high value proposal activity than we have ever seen. Even with a robust backlog in the second half of the year, those projects can either get delayed or canceled. We are seeing a few cancellations and a more cautious construction environment by fourth quarter of this year.
• Inflation for energy processing equipment [is an issue of concern], as demand will go up if the Iran war ends.
• I feel we will experience short-term uncertainty and supply disruption that will sort itself out before the end of the calendar year. New opportunities will open up following the conflict, and prices will stabilize and then fall slightly, generally. Economic activity will pick up to replenish hardware after the conflict ends, and the U.S. will be calling the shots worldwide.
• Business will certainly benefit from a more consistent economy and less conflict worldwide.
• I can't yet predict the next 12 months due to a lack of clear and rational federal government “policy.”
• It seems like we are seeing some constriction in the market. It is a combination of uncertainty going forward and still working through post-Covid overbuilding. I think a small recession is in the works.
• Business needs consistent and predictable government policy. We appear to currently have none as a nation, regardless of which party is in power.

• No one likes uncertainty, and if war is anything it is that. 

• The war has driven uncertainty in our business.

• Global uncertainty with the war in Iran is a primary concern at the moment, both with crude oil movements, but also potential supply-chain disruptions and heightened security concerns.

• I expect inflation in input prices to remain a major concern, notwithstanding political pressure to lower rates. In my opinion, the cost of capital is currently at a balanced, reasonable, long-term sustainable level, and lowering interest rates would serve to both fuel inflation and inflate asset prices with the flow of cheaper money.

• Because oil touches so many facets of our economy, it’s inevitable that if oil prices stay high, it will lead to higher raw materials and finished goods prices. I also believe that as we diminish our stockpiles of military hardware (missiles), we are opening the door for China to invade Taiwan. If we think high oil costs are bad, wait until we don’t have any semi-conductor chips to power our technology.

• Tariffs continue to hurt our industry and require our manufacturers to use incentives sparingly.
• Our business does best when consumers feel good about the economy. The current administration has created so much damage and uncertainty that it will be years before business returns to normal. It is possible it might never return to normal.

• Hiring qualified candidates continues to be a serious problem for us, especially hiring truck drivers. If the administration pulls foreign truck drivers from the pool of available drivers, that will tighten the market for CDL (commercial driver’s license) drivers.