Texas Service Sector Outlook Survey

January 28, 2020

Texas Retail Outlook Survey

January 28, 2020

*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

January 28, 2020

Downloadable chart

Texas Retail Outlook Survey

January 28, 2020

Downloadable chart

Texas Service Sector Outlook Survey

January 28, 2020

Comments from Survey Respondents

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

Pipeline Transportation

• The energy space continues to face headwinds on uncertainty of global demand, increased competition and investor sentiment.

Support Activities for Transportation

• Trade wars are impacting us greatly in terms of both rates and volumes.
• We got a new contract and are probably getting another big one.

Warehousing and Storage

• Our organization is in the midst of unprecedented growth, generating record revenues for the full year 2019 that were up 25 percent from the prior year, and we are expected to add at least another 25 percent in 2020. We're primarily a liquid hydrocarbon port and are benefiting from the continued growth in production in West Texas which, while we expect it to slow in 2020 compared with 2019, will not have a direct impact at this time on the oil export component of our business.

Credit Intermediation and Related Activities

• Beginning in January, predicting the future performance is usually a best guess based on the past year's accomplishments. Budgets are usually conservative and a little pessimistic especially going into an election year. Business activities have improved with the support of several local, public and statewide infrastructure activities boosting economic impacts, including increased sales tax revenue. Loan activity has started to increase with several loans in the pipeline and funding coming online the latter part of January. Deposits increased over year-end 2018 by 10 percent and have been stable into January with anticipated increases in public funds as property, and ad valorem taxes are paid to the tax collector and distributed to the public entities.
• There is lots of regulatory noise in our subprime financial services space coming out of the House in DC.
• Either the stock market rally or the repo market debacle, or a combination of both, has caused a lack of liquidity. This lack of liquidity within the markets is being felt, even by companies that are not large.
• There have been potential clarifications in China trade activity and no negative energy market news.

Securities, Commodity Contracts, and Other Financial Investments and Related Activities

• As a financial services company, we benefited from the strong market valuation increases in 2019. However, I am cautiously optimistic for 2020. I believe consumer confidence, if it worsens, will slow economic activity and slow our ability to grow and hire.

Real Estate

• Economic news of Central Texas development has spurred increases in the number of commercial appraisals we have seen over the last four months.
• The weather has been good. People are happy to have the holidays behind them and are out looking at houses.

Professional, Scientific and Technical Services

• We are hoping that momentum experienced in third and fourth quarter 2019 carries into the first half of the year. We are also looking forward to clarity about the direction of the Democratic party with a nominee so we enter third quarter with some idea of what might happen that supports a favorable business cycle, or perhaps disrupts it. Either way, we will know and can plan accordingly. It is sure to be an unpleasant ride.
• Although our political climate is a mess, the real estate industry seems to remain stable. We enjoyed a very robust fourth quarter for both the commercial and residential side of our business, and January is starting out strong. This is an election year, so we will have to wait and see how it plays out.
• 2019 saw an uptick in demand for our services and better rates, so we had a very good year despite higher costs. In 2020, we will likely see higher rates, but I would be surprised if demand was as hot for us as in 2019. Real estate and corporate work were very strong in 2019. This has been a very strong run for real estate and one wonders how long it can go on.
• We are a supplier in the automotive industry supply chain. Auto sales are down, and we are starting to feel the pinch.
• We feel pretty bullish as the year starts. We finished 2019 with momentum and have maintained that momentum. The resolution of the trade issues and the certainty now around Brexit have been helpful, too.

Management of Companies and Enterprises

• The six-month forecast is based on election season, which will slow our business some.
• The improving trade tariffs seem to be positive news for our customers and vendors.

Administrative and Support Services

• Election year expectations are that increases in interest rates are unlikely. However, overall business sentiment is still clouded by international and trade issues and their impact on consumer and business costs.
• Our core business services provided have increased 29 percent since early December. We are taking bookings for inspections out to mid-February at this time. Overall, it has been a positive 45 days. We think that this trend will continue. All sectors of our requested inspection services have increased except for oilfield work. We do not see this changing in the near future.
• January has been very wet and production slow. Sales are good.

Ambulatory Health Care Services

• Monthly economic limerick: Trade deal one done and now on to two; biggest issue is specific issues are few; no more manipulating yuan; suddenly Swiss franc is on; anxiety high but storm clouds likely through.
• We are seeing a slowdown related to patients with high-deductible insurance plans delaying care. This is a seasonal issue; we typically recover in the March–April time frame.
• Medicare Advantage plans have been very effective in demonstrating cost and utilization growth control at great cost to the seniors in home health services. MA plans continue to add low-cost services while tightening complex care issues that appear to be the greatest need for our seniors. MA plans need to be held responsible for outcomes and not rewarded for denial of desperately needed services.

Amusement, Gambling and Recreation Industries

• There seems to be a shift going on in Austin from the established businesses to the glitzy new and national ones. Some of the usual suspects are at play—increases in property taxes, general doing-business increases, loss of parking, real and perceived problems with the homeless in downtown Austin, etc. Several old restaurants and retail stores have gone out of business in the last several months. This is in conjunction with the brutally rapid increase in construction of high-rise buildings in the downtown area and around the Domain. Although change is inevitable, the problem is the new people and businesses do not understand the city, and Austin is slowly losing its soul and sense of community.

Food Services and Drinking Places

• We took a price increase in January and also gave raises.
• December is a holiday month. If business isn't good, the economy isn't going well.

Merchant Wholesalers, Nondurable Goods

• Our restaurant customers continue to be steady. We are bringing on a new customer in first quarter 2020 that will grow our revenue by 25 percent.

Motor Vehicle and Parts Dealers

• Following the year-end rush, things were quiet for a week or so but seem to be picking up now that January is half gone.

Clothing and Clothing Accessories

• As we transition from a department store to an off-price store, we will be decreasing our e-commerce transactions.

Historical Data

Historical data can be downloaded dating back to January 2007.

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.