Texas Manufacturing Outlook Survey

Results Summary

Historical data are available from June 2004 to the most current release month.

*Shown is the number of consecutive months of expansion or contraction in the underlying indicator. Expansion is indicated by a positive index reading and denoted by a (+) in the table. Contraction is indicated by a negative index reading and denoted by a (–) in the table.

**Shown is the number of consecutive months of improvement or worsening in the underlying indicator. Improvement is indicated by a positive index reading and denoted by a (+) in the table. Worsening is indicated by a negative index reading and denoted by a (–) in the table.

†Added to survey in January 2018.

Data have been seasonally adjusted as necessary, with the exception of the outlook uncertainty index, which does not yet have a sufficiently long time series to test for seasonality.

Production Index

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Comments from Survey Respondents

These comments are from respondents’ completed surveys and have been edited for publication.

• Negative U.S. national and global economic indicators continue to add to uncertainty in the six-month window. Policy decisions in the U.S. coupled with China’s financial situation are driving negative sentiments around the overall business outlook.

• We still cannot hire or find enough employees to be able to meet increasing demand. We would hire 20 today if we could. Demand just keeps increasing. Prices and lead times for shipments are at company historical highs.
• The tax increases contemplated in Congress create uncertainties for our business. The supply-chain bottlenecks continue to be problematic, and inflation in raw materials is putting pressure on profit margins.

• Inflation is here to stay.

• Labor shortages and raw material price increases and shortages continue to be major problems.
• It is really difficult to make an accurate assessment of the future.
• American iron and steel requirements in the Clean Water Act and the recent Infrastructure Investment and Jobs Act are causing extreme shortages and price escalations of required steel for water and wastewater projects. Many projects are being delayed or canceled altogether. We expect this to escalate through 2022 if not addressed.
• We are seeing a slowdown in capital projects starting, and our requests for quotes have also slowed.

• We are seeing signs that business is settling in at about pre-COVID levels. Unfortunately, most of our raw materials are more costly, thus requiring us to increase pricing.
• I anticipate the economy to get even worse the next 18–20 months with taxes and inflation rising.
• We are having problems with most all materials due to long delivery times.

• The COVID-19 impact is still real.
• Demand continues to remain strong across almost all markets. There are clear signs that inventory is building while scarcity continues, with a few components limiting production broadly. I have no idea when an overbuild of inventory will happen but fully expect that it will.

• We are still cautious regarding the next six months; there are numerous threats that have not gone away.

• Project delays have reduced our billable revenue. It is challenging to keep on manpower without projects being ready for installation of finished materials.

• [We are having] supply-chain issues; it is hard to get materials on time.

• We still see escalation in costs and selling prices.

• We are much busier this month than last, and incoming orders at the moment are surprisingly robust. October should be better than September, but the concern is what will six months from now look like. We are about to spend some money on equipment, including a major rebuild of one of our key pieces of machinery, so hopefully business will stay strong!

• We are experiencing severe increases in some raw-material prices and are unable to fill out some vacant positions, even at higher wages. This is putting tremendous strain both financially and operationally on the company.
• We are seeing price increases on ingredients. We are seeing domestic and international freight costs increase. We have joined ERCOT and fear unstable electrical supply/grid issues and are investing in backup generators with one or more alternative fuel sources. Generally, the catastrophic decisions and ongoing policy and legislative blunders by Biden et al., plus the looming tax increases, have virtually every businessperson I know deeply concerned about the near-term impact and the future of our country. The detached reality is incredible. The inadequate labor pool and nonwork incentives have compounded the problem.

• Raw material supply shortages at tier 2 and 3 supplier levels have forced sales down 25 percent in August and September. Suppliers are reporting shortages of raw-material components and chemicals used in the production of our raw materials [as] a tier 1-level supplier to OEM [original equipment manufacturers]. In addition, they are citing high turnover of the workforce and consistent absenteeism as the root cause in 70 percent of the cases affecting us—a direct result of government-handout subsidies. The high employee turnover is also negatively affecting the quality of raw materials due to the learning curve of those low- or moderately skilled jobs. We have demand from our OEM customers but a lack of raw-material supply.

Historical Data

Historical data can be downloaded dating back to June 2004.

Indexes

Download indexes for all indicators. For the definitions of all variables, see Data Definitions.

All Data

Download indexes and components of the indexes (percentage of respondents reporting increase, decrease, or no change). For the definitions of all variables, see Data Definitions.