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.

• The outlook has dimmed slightly. Some raw material costs have decreased, while others continue to increase or stay the same (higher level). Some customers are quietly cutting back on orders. We are in the food business, so the change is subtle. Maybe they are reducing quantities slightly or just moving delivery dates out a week or two. I think we are starting to see a subtle softness in demand.
• Inflation in key raw materials and manufacturing expenses is expected to continue.
• Uncertainty is driven by the current political climate and the lack of accountability within the federal governance structure. We just cannot have a capitalistic and growth environment without a common defense at the border and domestic tranquility across America.

• As a contract manufacturer for many different sectors, we see that home goods sales such as mattress subcomponents and comforters and pillows have consistently dropped and are half of what they were this time last year.

• We have been anticipating (and experiencing) a decline in business for several months now. The rate increases are starting to go too far.

• The inflation in paper prices has artificially increased our sales numbers as we pass on that doubling of raw material cost increases over the past few months. It is squeezing our clients’ budgets and will impact next year’s sales overall. Plus, as inflation hits every sector of our employees’ lives, the 5 percent pay increase we gave out early this year has been lost and they are getting further behind.

• Some international projects have come through, but there’s no big change in domestic projects.

• Inflation in raw material costs continues to be a drag on our profitability. We are unable to pass these costs on to our customers.

• Many items that were in short supply this spring are plentiful now.
• Overall business is down, especially in the building and construction market segment. Our industry is being severely impacted by competition from Mexico as well as Colombia, Ecuador, Malaysia, Vietnam, the Dominican Republic and Turkey. Mexico is exempt from Section 232 aluminum tariffs and is exporting to the U.S. at record levels. China is shipping aluminum products to Mexico at record levels, which has a negative impact on the U.S.

• Some raw materials are going down in cost; however, many other purchased components have had an increase in cost. Those levying surcharges have not removed those fees.
• Business is slowing. Companies are being more deliberate in how they spend money.
• We are still running strong and steady; however, we feel that the worsening economy will eventually catch up with us and may bring us back to reality.
• Biden's “Inflation Reduction Act” adds nearly a trillion dollars in government spending. Inflation occurs when too many dollars chase too few goods. So this will aggravate inflation. Mislabeling a bill doesn’t change the facts.

• Inflationary pressure is reducing orders while supply-chain pressure eases, so we have excess inventory for our customers. One customer is liquidating and will draw down their business. Several large customers with potential orders have delayed awards due to the market.
• We have seen a significant decrease in new orders, which is not sustainable [for us].
• Our business is shifting to cloud-based recurring revenue from premises-based system sales. This is the reason for our decrease in orders and inventory.
• We are still seeing issues with materials we source, particularly solar panels and products with aluminum. Lead times are four to six months in areas that had been two to four weeks.
• We saw weakness in the personal electronics market grow in the third quarter and began to see weakness in the industrial market space. We expect most markets to weaken in the fourth quarter, though an exception may be automotive.
• This year, new orders and business sales have been lower than last year and, looking forward to next year, I do not see an increase in sales for 2023.
• We continue to see long lead times and increased prices on components. A major customer has delayed or reduced capital spending for 2023, which moves projects (revenue) out for us six to 12 months.

• There is nothing positive to build on.
• Our production constraint has shifted from supply chain to labor. We cannot hire fast enough to increase production as fast as we would like to.

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.