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Texas Manufacturing Outlook Survey

Special Questions

June 25, 2018

Texas Business Outlook Surveys

Results below include responses from participants of all three surveys: Texas Manufacturing Outlook Survey (TMOS), Texas Service Sector Outlook Survey (TSSOS) and Texas Retail Outlook Survey (TROS).

Data were collected June 12–20, and 314 Texas business executives responded to the surveys.

  1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.
    Already adopted
    (percent)
    In process of adopting
    (percent)
    Plan to adopt
    (percent)
    Communication platforms (Skype, email, etc.) 64.6 1.9 1.6
    Social media 64.6 4.8 3.8
    High-speed wireless communication 54.8 2.5 1.9
    Intranet (private computer network) 49.7 1.3 1.6
    Mobile apps 49.4 8.0 4.1
    CRM (customer relationship management) system 45.5 8.6 5.1
    Cloud computing/edge computing 42.0 10.8 8.0
    Digital video/photography 41.1 2.9 0.6
    Collaboration platforms (SharePoint, Google Docs, etc.) 40.1 8.3 4.1
    E-commerce 40.1 4.1 3.5
    Telecommuting/mobile workforce 38.2 3.2 2.2
    Digitization 29.0 3.2 1.6
    GPS tracking 28.7 2.2 3.2
    Internet of Things (connection of physical objects to the internet) 22.0 5.7 2.2
    Modeling using high-performance computing 15.3 3.2 2.2
    Big data 10.8 8.9 9.6
  2. Already adopted
    (percent)
    In process of adopting
    (percent)
    Plan to adopt
    (percent)
    Drones 10.2 2.5 4.1
    Robotics 9.6 3.5 8.3
    Biometric authentication 8.0 2.2 10.5
    3D printing 7.0 1.9 9.9
    Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.) 5.4 8.0 11.8
    3D scanning 4.8 1.3 10.8
    Virtual reality/augmented reality 4.8 4.5 5.7
    Digital currencies (cryptocurrency, bitcoin, etc.) 1.9 0.3 5.7
    Nanotechnology 1.6 0.3 4.1
    Blockchain 0.6 1.6 10.5
    Other (please describe) 0.3 0.6 0.6
    None of the above (5.7 percent)  
  1. What are the main reasons why your firm is adopting these technologies? You may select up to three.
    June ’18
    (percent)
    To raise productivity 66.1
    To remain competitive/fend off new competitors 52.9
    To increase output (revenue/sales/production) 52.5
    To lower costs 39.7
    To expand into new business lines/markets 18.6
    To strengthen security and/or protect information 18.0
    To meet industry standards/government regulations 10.2
    Other (please explain) 2.7
  2. On net, how will the adoption of these technologies affect employment at your firm over the next five years?
    June ’18
    (percent)
    Increases our need for workers 12.5
    Decreases our need for workers 14.2
    Does not impact our need for workers 48.6
    Changes the type of workers we need but not the number 24.7

  3. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?
    June ’18
    (percent)
    Increase 65.4
    Leave unchanged 25.6
    Decrease 9.0

  4. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?
    June ’18
    (percent)
    Increased 23.1
    No effect 54.2
    Decreased 22.7

Texas Manufacturing Outlook Survey

Data were collected June 12–20, and 90 Texas manufacturers responded to the survey.

  1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.
    Already adopted
    (percent)
    In process of adopting
    (percent)
    Plan to adopt
    (percent)
    Communication platforms (Skype, email, etc.) 64.4 2.2 1.1
    Social media 58.9 4.4 4.4
    High-speed wireless communication 56.7 0.0 0.0
    Intranet (private computer network) 50.0 1.1 2.2
    Digital video/photography 43.3 1.1 1.1
    CRM (customer relationship management) system 42.2 12.2 4.4
    Mobile apps 40.0 6.7 4.4
    Cloud computing/edge computing 38.9 13.3 8.9
    Collaboration platforms (SharePoint, Google Docs, etc.) 38.9 10.0 5.6
    Telecommuting/mobile workforce 36.7 2.2 3.3
    E-commerce 34.4 4.4 7.8
    Digitization 33.3 2.2 4.4
    GPS tracking 32.2 2.2 3.3
    Internet of Things (connection of physical objects to the internet) 23.3 6.7 3.3
    Modeling using high-performance computing 21.1 3.3 1.1
    Robotics 20.0 5.6 18.9
    3D printing 17.8 1.1 18.9
    Biometric authentication 8.9 3.3 13.3
    3D scanning 7.8 1.1 22.2
    Big data 6.7 11.1 11.1
    Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.) 5.6 1.1 17.8
    Drones 5.6 2.2 7.8
    Virtual reality/augmented reality 5.6 6.7 10.0
    Nanotechnology 3.3 0.0 7.8
    Blockchain 0.0 1.1 14.4
    Digital currencies (cryptocurrency, bitcoin, etc.) 0.0 0.0 6.7
    Other (please describe) 1.1 2.2 1.1
    None of the above (3.3 percent)  
  2. What are the main reasons why your firm is adopting these technologies? You may select up to three.
    June ’18
    (percent)
    To raise productivity 70.9
    To lower costs 55.8
    To increase output (revenue/sales/production) 53.5
    To remain competitive/fend off new competitors 45.3
    To expand into new business lines/markets 19.8
    To strengthen security and/or protect information 16.3
    To meet industry standards/government regulations 7.0
    Other (please explain) 1.2
  3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?
    June ’18
    (percent)
    Increases our need for workers 15.1
    Decreases our need for workers 12.8
    Does not impact our need for workers 48.8
    Changes the type of workers we need but not the number 23.3

  4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?
    June ’18
    (percent)
    Increase 78.2
    Leave unchanged 16.1
    Decrease 5.7

  5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?
    June ’18
    (percent)
    Increased 20.5
    No effect 48.2
    Decreased 31.3

Special Questions Comments

These comments have been edited for publication.

Fabricated Metal Product Manufacturing

  • In light of manufacturing, these perceived, adopted, etc., tariffs are going to ruin our economy.

Machinery Manufacturing

  • Globalization and taxes have had detrimental effects on the decline of production for us.

Computer and Electronic Product Manufacturing

  • We have not been able to execute a price increase on existing products in 10 years due to globalization; however, health care costs and salaries keep going up year after year, causing service levels to decrease.

Transportation Equipment Manufacturing

  • With more internal data, we have been able to support passing along cost increases to our customers with specificity; it helps us demand improved pricing from suppliers as well.

Texas Service Sector Outlook Survey

Data were collected June 12–20, and 224 Texas business executives responded to the survey.

  1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.
    Already adopted
    (percent)
    In process of adopting
    (percent)
    Plan to adopt
    (percent)
    Social media 67.0 4.9 3.6
    Communication platforms (Skype, email, etc.) 64.7 1.8 1.8
    High-speed wireless communication 54.0 3.6 2.7
    Mobile apps 53.1 8.5 4.0
    Intranet (private computer network) 49.6 1.3 1.3
    CRM (customer relationship management) system 46.9 7.1 5.4
    Cloud computing/edge computing 43.3 9.8 7.6
    E-commerce 42.4 4.0 1.8
    Collaboration platforms (SharePoint, Google Docs, etc.) 40.6 7.6 3.6
    Digital video/photography 40.2 3.6 0.4
    Telecommuting/mobile workforce 38.8 3.6 1.8
    Digitization 27.2 3.6 0.4
    GPS tracking 27.2 2.2 3.1
    Internet of Things (connection of physical objects to the internet) 21.4 5.4 1.8
    Modeling using high-performance computing 12.9 3.1 2.7
    Big data 12.5 8.0 8.9
    Drones 12.1 2.7 2.7
    Biometric authentication 7.6 1.8 9.4
    Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.) 5.4 10.7 9.4
    Robotics 5.4 2.7 4.0
    Virtual reality/augmented reality 4.5 3.6 4.0
    3D scanning 3.6 1.3 6.3
    3D printing 2.7 2.2 6.3
    Digital currencies (cryptocurrency, bitcoin, etc.) 2.7 0.4 5.4
    Blockchain 0.9 1.8 8.9
    Nanotechnology 0.9 0.4 2.7
    Other (please describe) 0.0 0.0 0.4
    None of the above (6.7 percent)  
  2. What are the main reasons why your firm is adopting these technologies? You may select up to three.
    June ’18
    (percent)
    To raise productivity 64.1
    To remain competitive/fend off new competitors 56.0
    To increase output (revenue/sales/production) 52.2
    To lower costs 33.0
    To strengthen security and/or protect information 18.7
    To expand into new business lines/markets 18.2
    To meet industry standards/government regulations 11.5
    Other (please explain) 3.3
  3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?
    June ’18
    (percent)
    Increases our need for workers 11.4
    Decreases our need for workers 14.8
    Does not impact our need for workers 48.6
    Changes the type of workers we need but not the number 25.2

  4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?
    June ’18
    (percent)
    Increase 60.3
    Leave unchanged 29.4
    Decrease 10.3

  5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?
    June ’18
    (percent)
    Increased 24.1
    No effect 56.7
    Decreased 19.2

Special Questions Comments

These comments have been edited for publication.

Professional, Scientific and Technical Services

  • Clients have much more access to information about our firm and our competitors, making the market more competitive.
  • The workforce will shift somewhat. Some roles will be impacted to a greater degree by automation, and productivity will be enhanced in others, but we plan to expand in some of those areas and capture work with lower/controlled pricing, but ultimately better margins.

Administrative and Support Services

  • Costs have crept up as a result of the tight employee market. The intensity of the competition and low barrier of entry into the staffing industry have given clients an escape route for the moment by moving to low-price small companies attempting to break into the market.
  • We are using technology to link offices and workers in areas outside the main office.
  • We are still running into acquiring bank loans to acquire capital equipment that is not directly utilized in our line of business. Technology infrastructure does not seem to be a big concern for the bankers at this time.

Ambulatory Health Care Services

  • As an outpatient diagnostic imaging facility, we have no ability to raise costs; our reimbursement typically declines slightly each year. Health care for us is a deflationary business. We remain profitable due to our increasing productivity, but this can only increase so much.

Accommodation

  • The tightening of the labor market and lack of available workers are forcing us to find ways to become more efficient in the delivery of our services.

Food Services and Drinking Places

  • We have only experienced normal inflation. So far, we have been able to increase prices to cover these costs.

Personal and Laundry Services

  • Most of the technologies do not apply to my industry.

Texas Retail Outlook Survey

Data were collected June 12–20, and 44 Texas retailers responded to the survey.

  1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.
    Already adopted
    (percent)
    In process of adopting
    (percent)
    Plan to adopt
    (percent)
    Communication platforms (Skype, email, etc.) 63.6 0.0 2.3
    Social media 61.4 2.3 4.5
    High-speed wireless communication 54.5 0.0 2.3
    Mobile apps 52.3 6.8 0.0
    Cloud computing/edge computing 50.0 6.8 4.5
    E-commerce 47.7 9.1 4.5
    CRM (customer relationship management) system 45.5 9.1 6.8
    GPS tracking 43.2 0.0 2.3
    Digital video/photography 40.9 4.5 0.0
    Intranet (private computer network) 40.9 0.0 0.0
    Telecommuting/mobile workforce 36.4 2.3 2.3
    Collaboration platforms (SharePoint, Google Docs, etc.) 34.1 4.5 6.8
    Internet of Things (connection of physical objects to the internet) 27.3 0.0 0.0
    Digitization 22.7 2.3 2.3
    Big data 13.6 9.1 4.5
    Drones 11.4 2.3 0.0
    Modeling using high-performance computing 9.1 4.5 0.0
    Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.) 4.5 9.1 6.8
    Biometric authentication 4.5 0.0 6.8
    Robotics 4.5 6.8 2.3
    Digital currencies (cryptocurrency, bitcoin, etc.) 2.3 0.0 4.5
    Virtual reality/augmented reality 2.3 2.3 2.3
    3D printing 0.0 4.5 9.1
    3D scanning 0.0 4.5 6.8
    Blockchain 0.0 0.0 9.1
    Nanotechnology 0.0 2.3 2.3
    Other (please describe) 0.0 0.0 0.0
    None of the above (13.6 percent)  
  2. What are the main reasons why your firm is adopting these technologies? You may select up to three.
    June ’18
    (percent)
    To raise productivity 73.7
    To remain competitive/fend off new competitors 71.1
    To increase output (revenue/sales/production) 60.5
    To lower costs 26.3
    To expand into new business lines/markets 15.8
    To strengthen security and/or protect information 10.5
    To meet industry standards/government regulations 2.6
    Other (please explain) 2.6
  3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?
    June ’18
    (percent)
    Increases our need for workers 12.8
    Decreases our need for workers 12.8
    Does not impact our need for workers 51.3
    Changes the type of workers we need but not the number 23.1

  4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?
    June ’18
    (percent)
    Increase 65.0
    Leave unchanged 32.5
    Decrease 2.5

  5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?
    June ’18
    (percent)
    Increased 30.8
    No effect 46.2
    Decreased 23.1

Special Questions Comments

These comments have been edited for publication.

Motor Vehicle and Parts Dealers

  • Technology is driving our industry as it is the business model of the world. We spend more on technology today than ever before, and that trend will continue. We haven't found a way to pass the increased cost of doing business to the consumer. They want more for less. Technology has not allowed us to reduce a single head count. Our business model is flawed.
  • We have been increasing costs with technology with not necessarily enough savings in personnel to offset the cost of the technologies (i.e., connectivity, tech support of programs, inefficiencies of less-than-complete tech solutions, etc.). The tools to conduct business (at least in the retail arena) have changed, but the basic process is still the same.

Questions regarding the Texas Business Outlook Surveys can be addressed to Emily Kerr at emily.kerr@dal.frb.org,

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