Texas Manufacturing Outlook Survey

Texas Manufacturing Outlook Survey

Data were collected June 12–20, and 90 Texas manufacturers responded to the survey.

1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.

   	Already adopted (percent)	In process of adopting (percent)	Plan to adopt (percent)
   Communication platforms (Skype, email, etc.)	64.4	2.2	1.1
   Social media	58.9	4.4	4.4
   High-speed wireless communication	56.7	0.0	0.0
   Intranet (private computer network)	50.0	1.1	2.2
   Digital video/photography	43.3	1.1	1.1
   CRM (customer relationship management) system	42.2	12.2	4.4
   Mobile apps	40.0	6.7	4.4
   Cloud computing/edge computing	38.9	13.3	8.9
   Collaboration platforms (SharePoint, Google Docs, etc.)	38.9	10.0	5.6
   Telecommuting/mobile workforce	36.7	2.2	3.3
   E-commerce	34.4	4.4	7.8
   Digitization	33.3	2.2	4.4
   GPS tracking	32.2	2.2	3.3
   Internet of Things (connection of physical objects to the internet)	23.3	6.7	3.3
   Modeling using high-performance computing	21.1	3.3	1.1
   Robotics	20.0	5.6	18.9
   3D printing	17.8	1.1	18.9
   Biometric authentication	8.9	3.3	13.3
   3D scanning	7.8	1.1	22.2
   Big data	6.7	11.1	11.1
   Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.)	5.6	1.1	17.8
   Drones	5.6	2.2	7.8
   Virtual reality/augmented reality	5.6	6.7	10.0
   Nanotechnology	3.3	0.0	7.8
   Blockchain	0.0	1.1	14.4
   Digital currencies (cryptocurrency, bitcoin, etc.)	0.0	0.0	6.7
   Other (please describe)	1.1	2.2	1.1
   None of the above (3.3 percent)

2. What are the main reasons why your firm is adopting these technologies? You may select up to three.

   	June ’18 (percent)
   To raise productivity	70.9
   To lower costs	55.8
   To increase output (revenue/sales/production)	53.5
   To remain competitive/fend off new competitors	45.3
   To expand into new business lines/markets	19.8
   To strengthen security and/or protect information	16.3
   To meet industry standards/government regulations	7.0
   Other (please explain)	1.2

3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?

   	June ’18 (percent)
   Increases our need for workers	15.1
   Decreases our need for workers	12.8
   Does not impact our need for workers	48.8
   Changes the type of workers we need but not the number	23.3

   
   
4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?

   	June ’18 (percent)
   Increase	78.2
   Leave unchanged	16.1
   Decrease	5.7

   
   
5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?

   	June ’18 (percent)
   Increased	20.5
   No effect	48.2
   Decreased	31.3

Special Questions Comments

These comments have been edited for publication.

Fabricated Metal Product Manufacturing

• In light of manufacturing, these perceived, adopted, etc., tariffs are going to ruin our economy.

Machinery Manufacturing

• Globalization and taxes have had detrimental effects on the decline of production for us.

Computer and Electronic Product Manufacturing

• We have not been able to execute a price increase on existing products in 10 years due to globalization; however, health care costs and salaries keep going up year after year, causing service levels to decrease.

Transportation Equipment Manufacturing

• With more internal data, we have been able to support passing along cost increases to our customers with specificity; it helps us demand improved pricing from suppliers as well.

Texas Service Sector Outlook Survey

Data were collected June 12–20, and 224 Texas business executives responded to the survey.

1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.

   	Already adopted (percent)	In process of adopting (percent)	Plan to adopt (percent)
   Social media	67.0	4.9	3.6
   Communication platforms (Skype, email, etc.)	64.7	1.8	1.8
   High-speed wireless communication	54.0	3.6	2.7
   Mobile apps	53.1	8.5	4.0
   Intranet (private computer network)	49.6	1.3	1.3
   CRM (customer relationship management) system	46.9	7.1	5.4
   Cloud computing/edge computing	43.3	9.8	7.6
   E-commerce	42.4	4.0	1.8
   Collaboration platforms (SharePoint, Google Docs, etc.)	40.6	7.6	3.6
   Digital video/photography	40.2	3.6	0.4
   Telecommuting/mobile workforce	38.8	3.6	1.8
   Digitization	27.2	3.6	0.4
   GPS tracking	27.2	2.2	3.1
   Internet of Things (connection of physical objects to the internet)	21.4	5.4	1.8
   Modeling using high-performance computing	12.9	3.1	2.7
   Big data	12.5	8.0	8.9
   Drones	12.1	2.7	2.7
   Biometric authentication	7.6	1.8	9.4
   Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.)	5.4	10.7	9.4
   Robotics	5.4	2.7	4.0
   Virtual reality/augmented reality	4.5	3.6	4.0
   3D scanning	3.6	1.3	6.3
   3D printing	2.7	2.2	6.3
   Digital currencies (cryptocurrency, bitcoin, etc.)	2.7	0.4	5.4
   Blockchain	0.9	1.8	8.9
   Nanotechnology	0.9	0.4	2.7
   Other (please describe)	0.0	0.0	0.4
   None of the above (6.7 percent)

2. What are the main reasons why your firm is adopting these technologies? You may select up to three.

   	June ’18 (percent)
   To raise productivity	64.1
   To remain competitive/fend off new competitors	56.0
   To increase output (revenue/sales/production)	52.2
   To lower costs	33.0
   To strengthen security and/or protect information	18.7
   To expand into new business lines/markets	18.2
   To meet industry standards/government regulations	11.5
   Other (please explain)	3.3

3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?

   	June ’18 (percent)
   Increases our need for workers	11.4
   Decreases our need for workers	14.8
   Does not impact our need for workers	48.6
   Changes the type of workers we need but not the number	25.2

   
   
4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?

   	June ’18 (percent)
   Increase	60.3
   Leave unchanged	29.4
   Decrease	10.3

   
   
5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?

   	June ’18 (percent)
   Increased	24.1
   No effect	56.7
   Decreased	19.2

Special Questions Comments

These comments have been edited for publication.

Professional, Scientific and Technical Services

• Clients have much more access to information about our firm and our competitors, making the market more competitive.
• The workforce will shift somewhat. Some roles will be impacted to a greater degree by automation, and productivity will be enhanced in others, but we plan to expand in some of those areas and capture work with lower/controlled pricing, but ultimately better margins.

Administrative and Support Services

• Costs have crept up as a result of the tight employee market. The intensity of the competition and low barrier of entry into the staffing industry have given clients an escape route for the moment by moving to low-price small companies attempting to break into the market.
• We are using technology to link offices and workers in areas outside the main office.
• We are still running into acquiring bank loans to acquire capital equipment that is not directly utilized in our line of business. Technology infrastructure does not seem to be a big concern for the bankers at this time.

Ambulatory Health Care Services

• As an outpatient diagnostic imaging facility, we have no ability to raise costs; our reimbursement typically declines slightly each year. Health care for us is a deflationary business. We remain profitable due to our increasing productivity, but this can only increase so much.

Accommodation

• The tightening of the labor market and lack of available workers are forcing us to find ways to become more efficient in the delivery of our services.

Food Services and Drinking Places

• We have only experienced normal inflation. So far, we have been able to increase prices to cover these costs.

Personal and Laundry Services

• Most of the technologies do not apply to my industry.

Texas Retail Outlook Survey

Data were collected June 12–20, and 44 Texas retailers responded to the survey.

1. Which of the following technologies: has your firm already adopted; is your firm in the process of adopting; does your firm plan to adopt within the next three years? Please select all that apply.

   	Already adopted (percent)	In process of adopting (percent)	Plan to adopt (percent)
   Communication platforms (Skype, email, etc.)	63.6	0.0	2.3
   Social media	61.4	2.3	4.5
   High-speed wireless communication	54.5	0.0	2.3
   Mobile apps	52.3	6.8	0.0
   Cloud computing/edge computing	50.0	6.8	4.5
   E-commerce	47.7	9.1	4.5
   CRM (customer relationship management) system	45.5	9.1	6.8
   GPS tracking	43.2	0.0	2.3
   Digital video/photography	40.9	4.5	0.0
   Intranet (private computer network)	40.9	0.0	0.0
   Telecommuting/mobile workforce	36.4	2.3	2.3
   Collaboration platforms (SharePoint, Google Docs, etc.)	34.1	4.5	6.8
   Internet of Things (connection of physical objects to the internet)	27.3	0.0	0.0
   Digitization	22.7	2.3	2.3
   Big data	13.6	9.1	4.5
   Drones	11.4	2.3	0.0
   Modeling using high-performance computing	9.1	4.5	0.0
   Artificial intelligence (voice recognition, decision trees, autonomous vehicles, etc.)	4.5	9.1	6.8
   Biometric authentication	4.5	0.0	6.8
   Robotics	4.5	6.8	2.3
   Digital currencies (cryptocurrency, bitcoin, etc.)	2.3	0.0	4.5
   Virtual reality/augmented reality	2.3	2.3	2.3
   3D printing	0.0	4.5	9.1
   3D scanning	0.0	4.5	6.8
   Blockchain	0.0	0.0	9.1
   Nanotechnology	0.0	2.3	2.3
   Other (please describe)	0.0	0.0	0.0
   None of the above (13.6 percent)

2. What are the main reasons why your firm is adopting these technologies? You may select up to three.

   	June ’18 (percent)
   To raise productivity	73.7
   To remain competitive/fend off new competitors	71.1
   To increase output (revenue/sales/production)	60.5
   To lower costs	26.3
   To expand into new business lines/markets	15.8
   To strengthen security and/or protect information	10.5
   To meet industry standards/government regulations	2.6
   Other (please explain)	2.6

3. On net, how will the adoption of these technologies affect employment at your firm over the next five years?

   	June ’18 (percent)
   Increases our need for workers	12.8
   Decreases our need for workers	12.8
   Does not impact our need for workers	51.3
   Changes the type of workers we need but not the number	23.1

   
   
4. Overall, do you expect your firm to increase employment, leave employment unchanged, or decrease employment over the next five years?

   	June ’18 (percent)
   Increase	65.0
   Leave unchanged	32.5
   Decrease	2.5

   
   
5. On net, how have long-term trends in your industry, such as technological change and globalization, affected your firm’s ability to pass on cost increases to customers over the past five years?

   	June ’18 (percent)
   Increased	30.8
   No effect	46.2
   Decreased	23.1

Special Questions Comments

These comments have been edited for publication.

Motor Vehicle and Parts Dealers

• Technology is driving our industry as it is the business model of the world. We spend more on technology today than ever before, and that trend will continue. We haven't found a way to pass the increased cost of doing business to the consumer. They want more for less. Technology has not allowed us to reduce a single head count. Our business model is flawed.
• We have been increasing costs with technology with not necessarily enough savings in personnel to offset the cost of the technologies (i.e., connectivity, tech support of programs, inefficiencies of less-than-complete tech solutions, etc.). The tools to conduct business (at least in the retail arena) have changed, but the basic process is still the same.