Texas Service Sector Outlook Survey

Historical data are available from January 2007 to the most current release month.

Historical data are available from January 2007 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.

Texas Service Sector Outlook Survey

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Texas Retail Outlook Survey

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Texas Service Sector Outlook Survey

Comments from Survey Respondents

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

• Supply chains are an issue. We are selling new work; however, we cannot do the work because we do not have materials.

• The federal government mandate for federal contractors is a threat to our ability to deliver products and services. About two-thirds of our employees are vaccinated, and exemptions are being reviewed with no clear-cut criteria for decisions. There will be some flexibility after Jan. 4 to work within company policies as we understand the rules today, but hiring qualified replacement workers if it comes to this will be very challenging in the current labor environment. Further, if there are differences between OSHA [Occupational Safety and Health Administration] rules and federal contractor rules, employees will look at OSHA companies if they are refractory to vaccination or have a political view of the issue, which might be fueled by several state government declarations.

• Currently, the demand for trailers is huge. Since the market has very few used trailers available, their current price is more than double. Because of this, I cannot buy more trailers at double their price, while not knowing if this boom in demand will give in next year. Further, my rates to customers have remained the same since these are yearly contracts.
• Companies have need for more inventory, which is better for my business.

• [Activity] is stable for now. We are expecting continued growth in 2022 in all items—revenue, shipments, wages paid and costs for us to provide our services.

• Hiring talent and inflation are our greatest challenges right now. There are too few people available in the market. The cost of everything has increased 5 to 15 percent. We will be addressing how much can be absorbed in the prices of future contracts over the next couple of months.

• Property taxes have increased due to elevated valuations for residential and raw land. There has been a migration of buyers to rural markets. We are seeing a problem with the supply chain creating issues for replacing and repairing equipment such as thermostat controls and AC compressors. Cattle prices are steady, demand for Spanish goat and hair sheep is very strong, and the market continues to be reaching all-time highs. The start of hunting season has seen an uptick in business activity for local retail stores.
• Parts deliveries are negatively impacting our collision business. This is presenting an opportunity for another vertical integration solution (additive manufacturing).

• The administration in Washington as well as Congress appear to be doing their best to create uncertainty and escalating costs. These will be headwinds to the business decision-making and investment process.
• As a financial services firm, we are both concerned with and impacted by economic and market conditions. Salaries will likely receive a 3 percent COLA [cost of living adjustment] this year, similar to the last couple of years.

• The outlook for inflation, governmental legislative activity and world politics are all unchanged lately, so my outlook is unchanged.

• My outlook is that the supply chain is not getting fixed quickly, and without inventory to sell, our business model deteriorates very quickly. Inflation, a tax on everyone, is driving costs up rapidly, and we do not have the inventory to markup and cover the increased costs we are incurring today. Transitory [inflation] is bull.

• The major issue I see is the excessive rhetoric about inflation. The idea that the infrastructure bill is fueling inflation, as professed by a multitude of politicians, will continue to dominate the news. Americans are spending and, hopefully, it will lead to more investment in the energy industry, meaning more projects and hence more work in the consulting arena. Energy companies are moving slowly and assessing the so-called “energy transition,” but most don’t appear to know where they are going. They are just throwing some money and words at the issue to see what sticks with the general public.
• Due to the current high demand and workload, which have sustained throughout the year, we are planning on hiring additional people and raising wages and prices for 2022.
• Our company office is fully open five days per week (workweek); people can come on weekends if they want to. All of our employees did voluntary COVID-19 vaccination. COVID mandates are hurting businesses; mandates should be taken out and businesses allowed to use voluntary measures to deal with COVID-19 and health issues. COVID-19 is under control generally; most are vaccinated and people’s voluntary support is the best way to handle health issues from this point on.
• The real estate market remains very strong. Although the residential market has cooled slightly, the commercial market has continued to accelerate. Looking into 2022, we feel the residential market will return to a more normal market, while the commercial market will continue to be robust.
• Our firm is having a very good year across many sectors, and we are optimistic about the future.
• Concerning our outlook for business activity in six months, we see it slowing down from the frantic pace of 2021 but still growing. [Saying that] our outlook has worsened in six months does not signal trouble in six months—just a slowing to a more normal pace.
• It is hard to find people for vacant positions. The logistics network is in disarray, and it's increasing costs and uncertainty.
• Our company is performing very well financially. Company leadership continues trying to find its footing in the new culture where large groups are not safe for unvaccinated staff, and face-to-face has lessened substantially.
• The infrastructure bill is good for our company and industry. Inflation is making fees, wages, salaries and benefits challenging.
• The volume of work appears to remain the same for the next six months. Rising material prices and availability are a concern.

• We have had many increases in our cost of input materials, and we are unable to pass all of these expenses to customers either due to contracts or the risk of losing the customer.
• The increasing costs are escalating more quickly than we can respond with pricing. This is especially true as our contract work is holding us to our pricing. Health insurance increases of 30 percent a year are more than industry can support. Being barely at 100 employees, we are considered a big company, when our labor costs are at 45-plus percent. These are very difficult times, and companies our size are suffering.
• Tax uncertainty and higher costs of operating, coupled with a lack of workers to handle the business, have made doing business harder.

• There is absolutely pricing pressure. Labor [availability] is much better after the end of extended unemployment benefits. But labor is not as productive as it was 12 months ago. Our production is off 8 percent and it isn’t the machines.
• I think inflationary pressures are permanent, and easy money policy (QE [quantitative easing] and fiscal policy) is the poison, not the antidote.
• Supply-chain issues and inflation concerns increase uncertainty about future revenue and the ability to make capital expenditures on schedule and on budget.

• Labor costs have increased substantially to retain employees; we have had several hired away by hospitals with signing bonuses and significant raises. We have raised our minimum hourly rate to $17 from $13. Payroll overall is up 8 percent this year.
• Health care continues to be impacted significantly due to a shortage of trained clinicians, especially nursing. Vaccination requirements and mandates are causing significant distress amongst the smaller employers where staffing is traditionally very, very tight. The Jan. 4 deadline for the vaccination requirement is being watched with significant concern from employers as well as employees.
• Just in time [is] so 2019 with major woes in supply chain; Staffing also had been JIT [just in time] and now causing real pain; Fed Reserve [is] insanely able; Thankfully now is stable; Those with sense will keep issues away from campaign.
• Supply-chain issues seem to be improving as we are seeing fewer shortages of supplies critical for running our business. Our need for more employees exists now, but the quality of candidates and their salary requirements are creating difficulties for hiring.

• Due to labor shortages, and changing employee work/life preferences, our company is evaluating scheduled hours and shift requirements to allow more flexibility of work hours, times, PTO [paid time off] requirements, etc.

• The costs for parts and supplies are increasing daily. The reorder cost per item has increased 30 percent since the last order.

• In the hospitality industry, improvement is slow, but it is happening. There is difficulty finding labor. We are taking it one day at a time.

• The vaccine mandate would be very negative for our labor situation.
• We need policies that support our businesses in growth.
• The supply chain remains a major concern. Wage growth continues, but labor shortages persist.
• We continue to see increased wage pressure and supply-chain shortages, along with increased cost of sales and reduced inventory, due to the these supply-chain backlogs. As well, we see a material shortage in the labor market. We do not see the above pressures subsiding in the near term.
• We will try to open for lunches in December at two of our restaurants near offices. We are hoping for the best.
• Spikes of COVID increasing in a neighboring state, as well as other spots around the country, are of serious concern. COVID impacts on business travel and business entertaining continue to hurt. People will go to sporting events, concerts and weddings but not to the office. Shortages of employees, as well as employees quitting at the drop of a hat, make it necessary to turn business away during many peak periods, where our profit comes from. Costs of goods continue to soar and likely will continue to do so. It’s tough to raise prices when you have empty seats. It is perhaps the most difficult operating environment in my 40-year career.

• New-vehicle inventory is the issue. The chip shortage created disruption and will not recover for several months, if not longer.
• Inventories remain tight.
• Inflation and generally broad supply-chain shortages have us concerned about the general health of the economy.
• Production of new vehicles is gradually increasing as a few more chips become available. Demand is still strong, and we expect our sales to increase as we receive more inventory.
• Supply-chain issues, primarily chips, have crippled the automobile business. Currently, our new-car inventory is in single digits—it’s normally 150–200 cars.

• We continue to have to be creative to attract employees. We are now trying to utilize staffing agencies to help us. Then we try out the employee for some weeks or months before making an offer for permanent employment.

Historical Data

Historical data can be downloaded dating back to January 2007.

Indexes

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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.