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.

Data have been seasonally adjusted as necessary.

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

Survey participants are given the opportunity to submit comments on current issues that may be affecting their businesses. Some comments have been edited for grammar and clarity.

• High interest rates on a relative basis, federal policy uncertainty and the inflationary impact of tariffs are all serving as economic impediments.
• Overall, the job market is miserable. I cannot remember it being worse; perhaps in 2010 it was similar. But technology has changed things since then. As the owner, I'm on edge day to day, week to week, doing all I can to survive without laying off staff. But that is coming next if the economy and job market don't pick up.

• The political environment has been a big influence on the overall anxiety in the marketplace. We anticipate that the benefit of the essential changes in government fiscal management will become even more obvious in 2026 and will have a positive impact on the economic attitude.

• The higher education landscape is constantly evolving and is significantly impacted by immigration and visa policies as well as new student loan limits. Uncertainty remains extremely high.

• It looks like the restaurant sector is slowing down. Input prices and wages continue to rise.

• Lower oil prices and uncertainty of the mantra "Drill, baby, drill" affect producers, which impacts midstream companies over the long term.

• There has been an increase in queries and solicitations in the last couple of months.  However, the quantity of conversion into real contracts is still uncertain, and the timing of resulting income is uncertain as well. Projections are more difficult to make into the next six months.
• December revenue is much better for us than the last three months (on a monthly basis). The year is ending OK for us (break-even). We think 2026 will be a much better year for us vs. 2025. We think overall the economy will show stronger growth, and the job market will get much better with more hiring in tech and elsewhere. We expect to begin hiring in 2026 after many years of not hiring.
• With the stymied outlook from tariffs and a new administration early in 2025, our backlog suffered (from $4 million to only $1.5 million). And now, with minority certifications going away, we will likely no longer be competitive in the marketplace and will have to close or sell in 2026.
• My clients are laying people off and cutting budgets, which is impacting my revenue. I had to lay off people and cut benefits.
• In real estate, interest rates are important. While interest rates have decreased, it hasn’t made a measurable impact. If rates continue to decrease, it should increase activity in the spring.
• While the economy is certainly not great, it seems to be holding steady. That consistency allows businesses, including our clients, to be more proactive in their planning.
• The commercial real estate market continues to improve, while the residential market remains slow for the third year in a row. We need a major shift in consumer sentiment for home ownership to get this market back. Hopefully, 2026 will be the start.
• There are the beginnings of renewals in the Dallas-Fort Worth real estate (industrial/logistics/final manufacturing) development market. Fingers crossed.
• We now focus on the energy markets. AGI [artificial general intelligence] seems to be lowering employment in knowledge-worker arenas.
• It looks like the economy is slowing. We're receiving more pressure to reduce our prices, and we need to get more work.
• We're seeing a reduction in the number of opportunities for consulting services in the public sector. Increased competition is noticeable for ongoing solicitations. The outlook seems uncertain.

• There still seems to be some apprehension in the market concerning spending, slower cycle times. As tariff concerns diminish, I expect spending and confidence to pick up in 2026.

• The impact of tariffs, along with poorly thought-out tariff strategy, continues to negatively impact the manufacturing industry, which is impacting our business.

• We are a capital goods dealer that sells heavy construction equipment. We were hoping for a big December, but as of today, no one is spending any money on construction equipment.

• As a financial services firm, we are impacted by equity and bond market fluctuations. Fourth quarter 2025 revenue is up due to market gains and improvement in bond prices. Health insurance premiums for 2026 significantly increased—20 percent-plus on average, depending on plan. This clearly increases employer and employee costs.
• Our company is in growth mode, therefore there is more uncertainty. But we are adding services and personnel coverage for 2026.

• With ongoing enforcement removing invalid commercial driver license holders and excess capacity from the industry, we should be able to stop the four-year losing streak for American truckers and start making money.

• Health insurance renewal for 2026 was a shock. Premiums went up 29 percent, which was already a big number. Congress must get something done to rein in these costs.

• It feels like the economy is doing well again.

• We are sitting tight for now. We are adjusting prices for next year based on producer price index.  We are also increasing wages by two percent for cost-of-living adjustments, plus three percent on average for merit increases. We expect higher capital spending but based more on need than any change in market conditions or economic outlook.

• The government shutdown impacted our revenue significantly. We had three layoffs last month.

• The THC ban has created uncertainty. Additionally, consumers are pulling back on their purchases of alcohol [due to] rising prices for other goods impacting their wallets.

• Customers continue to ask us for new products we can export to Latin America. This is an encouraging sign, because either the U.S. and reciprocal tariffs haven't dampened their appetite for U.S. goods, or their local economies remain strong.

• We continue to see softening of consumer demand in our volume brands like Subaru, Mazda and Volkswagen. Luxury brand sales are holding up better. There is also a reduction in maintenance and repair traffic in general at all dealerships.
• Lead volumes are softening, especially with customers at the entry level of the industry. I think they are very stretched at this point, and every action being taken in Washington only makes things worse.

• We are not buying as many capital assets because new customer installations have slowed down a bit. However, I'd say they have gone from great to good.

Special questions

For this month’s survey, Texas business executives were asked supplemental questions on wages, prices, outlook concerns and artificial intelligence. Results below include responses from participants of all three surveys: Texas Manufacturing Outlook Survey, Texas Service Sector Outlook Survey and Texas Retail Outlook Survey. View individual survey results.