Special Questions

Texas Manufacturing Outlook Survey

Data were collected September 15–23, and 60 Texas manufacturers responded to the survey.

NOTES: 56 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTE: 60 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 September 15–23, and 222 Texas business executives responded to the survey.

NOTES: 211 responses. Shown are averages, calculated as trimmed means with the lowest and highest 5 percent of responses omitted.

NOTE: 222 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.

• While tariffs have allowed some industries to prosper and regain domestic position in their respective industries, the steel industry has abused the opportunity, and mills are withholding capacity to drive prices up. Yes, data centers have consumed much of the available stock, but other projects are having to be delayed due to the concentration of steel providers controlling stock and mill runs to the detriment of fabricators.
• The lack of refinery capacity is going to continue to drive up energy costs, causing inflation. On the downside, the war will offset any of the good things we saw in the first two years of this administration.

• The next 12 months are uncertain.

• Open the Strait.

• Half our revenue comes from cosmetic services, which can be negatively impacted by sustained inflation and/or employment uncertainty. Geopolitical events can impact both; hence, geopolitical uncertainty is a primary outlook concern of ours. It's not about the supply chain, just the impact on the consumer psyche and disposable income.

• Our IT needs continue because the world is changing so fast that if we miss one update our systems become vulnerable. We also contend with equipment delays because the chips needed for the systems are on a boat trying to clear customs due to the tariff confusion. Things are not getting better, they are either the same or worse.
• When diesel goes up it hits us hard. Demand remains flat.
• Wage increases have been primarily at the salaried levels, where we instituted wide-ranging increases in cafe management, training and administrative costs. Input price increases have been spotty. We've seen increases in supplies, such as cups, napkins, bags, etc. And the cost of coffee has varied wildly due to geopolitical and political decision making, now exacerbated by fuel costs which impact freight as coffee is a very heavy, bulky product. Those costs can vary 50 percent, so we have taken a sort of middle expectation approach for 2027, expecting something close to the average of 2026, which, again, has been extremely volatile. We see very little room for increases in selling prices for drinks or food offerings, as our view is that the consumer is played out right now. We do routinely receive negative feedback about selling prices. There is little room for movement.

• Historically, while presidents always talk about getting into office and reducing prices, the reality is they have little control over limiting prices. On the counter side, the president has a lot of control over driving inflation to ever-increasing levels.

• There is domestic uncertainty.
• Our biggest concern is the lack of new construction in the private sector. Other than data centers, the rest of the private sector seems to have slowed down. Any issues in the market that cause our private sector clients uncertainty is a concern.

• Costs are rising but rents are falling.

• The data centers are not only driving up labor costs, but also steel prices are going way up, if you can even find it.

• Inflation seems to be the main concern.

• A current concern is the potential for fuel supply disruptions and the impact on fuel costs. The current administration has announced measures intended to improve the flow and availability of fuel through the U.S. distribution networks. Also, while we are growing again, the high cost of capital presents a challenge.

• We need to end the war in Iran, which is a direct cause of inflation for our company.