Texas Manufacturing Outlook Survey

September 30, 2019

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 2019.

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.

September 30, 2019

Production Index

Downloadable chart

September 30, 2019

Comments from Survey Respondents

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

Chemical Manufacturing

• We see a weakening in demand in the fourth quarter.
• Turnaround work has slowed production.

Primary Metal Manufacturing

• We are at maximum production and have been for a year or so. We have forecasted a sales slowdown, but it is not occurring yet.

Fabricated Metal Product Manufacturing

• We believe that the political climate will now start affecting business negatively due to the uncertainty.
• Business is good for us this year. Each year has been higher than the previous year.
• We have seen a small decrease in deliveries due to weather conditions in the Houston area.

Nonmetallic Mineral Product Manufacturing

• Uncertainty due to tariffs is a big problem for costing—selling prices—planning. Do we find vendors in alternate countries from China (which may not be possible in the 12–24-month short term)? Do we redesign products, and expand our factory to make some products here? It is very difficult to plan.

Machinery Manufacturing

• We had a dramatic surge of work over the spring and summer, and now it is looking as though it is settling back down. We went through eight people in six months in the attempt to fill employment needs. There is no skilled labor to be found, much less kids who really want to work and learn. It is a really pitiful pool out there.
• Business has increased substantially, but we know that after the New Year, business will slow considerably. All of our major jobs will be completed, and the pipeline is slowing. I believe that the political environment has more to do with the 2020 business cycle than anything else. Even the tariffs aren’t that big of a concern if there’s less business. But it’s great to see the interest rates decreasing, which will help reduce our costs.
• We’ve seen a definite uptick in orders for the third quarter.
• The petroleum industry, military equipment manufacturers and foundries are all concerned that these industries will suffer in the event that Congress or the White House goes Democrat. In response, capital expenditures have dried up.

Computer and Electronic Product Manufacturing

• As we work through inventories, the tariffs will begin to kick in at the beginning of 2020. We expect to raise prices for our customers. Since we do all of our business in the U.S., we believe our competitors will also raise prices.
• The primary change in increased costs for raw material is gold.

Electrical Equipment, Appliance and Component Manufacturing

• The trade war is causing significant pain to my business. The Trump administration policies have not produced economic growth for my business at all. We have been seeing decreasing revenues each year since his taking office and are seeing a decrease in business each year since his taking office. I cannot sustain the losses. President Trump’s threats against energy efficiency, the tariff war, our inability to leverage tariff waivers like some other large companies can, and economic policies that have not favored our business will put me out of business by year-end.
• Things are going well and have been for the last few years. Uncertainty in the global economy and political scene enter the conversations with customers, but the construction backlog appears strong along with demand for our products.

Transportation Equipment Manufacturing

• Last month, there was more uncertainty about order volumes coming in the fourth quarter, and we were also experiencing delays receiving key components (truck chassis) which had caused us to slow production. Over the past month, our chassis supply has increased and our fourth-quarter order forecast has solidified. As a result, we have increased our production output and revenue forecasts accordingly. We are anticipating an economic slowdown over the next six to nine months but do not anticipate a recession. Therefore, we are adding sales team members for the long-term strategy and hope to earn new business by taking market share.
• Our primary customer is the U.S. Department of Defense. The administration's moves to reassign funds for construction of a border wall concern us from the perspective of uncertainty about availability of funding for the items which make up our basic product lines.

Furniture and Related Product Manufacturing

• We are trying to keep our head above the water.

Food Manufacturing

• In 2020, we plan to invest in capital projects, mainly equipment, to drive efficiencies and lower our dependence on labor to fuel our growth.

Textile Product Mills

• Current order demands are very low in home furnishings. New clients are expected to launch in the next three months, but we remain very worried about the slowing order demand.

Paper Manufacturing

• Business is steady at a lower level, with no expected change in the near future.

Printing and Related Support Activities

• We are experiencing strong demand for manufactured goods, slightly influenced by Chinese tariffs. The labor market is very difficult—it’s difficult to find semi-skilled and skilled talent.
• We have caught a flurry of work, with a significant increase in need for overtime work in many areas. This is somewhat typical for this time of year for us, although it may be short lived as incoming orders seem to be slowing down. We are very concerned about what the future six months hold; some promising news on the trade front and less tariff talk would be helpful.

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.