Dallas Fed services sector outlook index -7.7 vs -0.1 prior

• Previous was -0.1
• Revenue Index +8.7 vs. +7.7 previously
• Employment +0.6 vs. -0.2 previously
• Company forecast -3.1 vs. +1.0 previously
• 6-month index +12.4 vs. +20.5 previously

Comments in the report:

Facilities

• I feel like a recession is going to hit the US.

Storage and warehousing

• Things are relatively stable, prices are rising but not at a pace that makes us feel unjustifiably worried.

Publishing industries (excluding Internet)

• Our data supports the hypothesis that consumer spending is declining significantly. We will begin to see significant negative impacts on our business if spending continues to decline at the current rate through the end of the year. We are very concerned that the Fed has waited too long to cut interest rates and that by the time any future cuts begin to impact the economy, consumer spending will be at recessionary levels.
• We look forward to some modest cooling expected in compensation increases and some purchasing budgets.

Data processing, hosting and related services

• Costs continue to rise while pressure from customers and potential customers to keep prices down continues to grow.

Credit brokerage and related activities

• The economy is subject to market volatility caused by expected interest rate fluctuations and political instability. Lending activity is slowly improving, but liquidity remains a challenge as competition for deposits continues.
• A Fed cut in interest rates would immediately lower the cost of our money.

Securities, Commodity Contracts, Other Financial Investments and Related Activities

• Farm and livestock incomes have risen this year, while oil and gas and tourism activities have slowed.
• The volume of political noise is unsettling to business owners. Political ads are proliferating, providing little value and making business owners anxious.
• Activity has been held back a bit by rising personal debt coupled with uncertainty over interest rates.

Insurance companies and related activities

• New projects and new home purchase customers (for insurance) appear to have slowed somewhat.

Real Estate

• As the pressures in the multifamily housing sector mount, we are seeing a surge in lawsuits. Desperate landlords and suppliers are filing ridiculous lawsuits against anyone they think they can blame or collect money from.
• The expected decline in interest rates will certainly improve the prospects for commercial real estate investments through 2025.
• I feel like the election will dampen activity even after the inauguration, when things will be back to normal, unless there are major problems with the election.

Rental and Leasing Services

• We are a large heavy equipment distributor in Texas, Oklahoma and New Mexico. At the end of July, we were down 6.3 percent. This year-over-year decline has been steadily increasing throughout the year. We only declined 10 percent during the pandemic in 2020, and our average sales increase over the past 65 years has been 10.7 percent. So this year’s decline is unusual for us and it’s upsetting! People don’t have money. They park their cars and throw their keys into the dealership or the bank because it’s a car or food for the family. And worst of all, I think it’s just getting started..
• It has become easier to hire. It has also become easier to import our equipment. We do not import equipment directly, but our rental equipment is manufactured in Korea, and we buy it from the importer. If this happens next year, the tariffs imposed on Korea will hurt us greatly. We will have to pass these costs on to our customers, which will cause our prices to inflate in proportion to the tariffs.

Professional, Scientific and Technical Services

• It’s strange that headlines say inflation is falling, but in the design and construction industry, we haven’t seen prices fall. In fact, they’re rising. For example, a door that cost $3,000 a year or so ago is now $10,000. There’s less competition in the market. There are fewer local businesses. Many have closed because of the difficulty of maintaining a workforce and their owners are about to retire. Others have sold. There are still long lead times for items like transformers and generators.
• From 2022, jobs are down 40%. We sold just two jobs to expedite building permits last month. In July 2022, we sold over 30 jobs. New construction is actually declining. This is much worse than during the Great Recession.
• Everyone seems pretty sure about how the election and the economy are going. We don’t have the uncertainty that we usually see in the third quarter of a presidential election year. Our biggest problem is finding qualified engineers. We can grow our business a lot if we can find the right people.H.
• We understand that people’s psychology and the market are a major driver of the economy, and the upcoming election will certainly determine the course of American business for the next four years. Frankly, I don’t think this economy can withstand the ravages of what it has seen since 2021.
• As interest rates continue to rise, the overall real estate market continues to decline. Demand for both commercial and residential transactions continues to decline, and we feel that the market will only recover with lower interest rates.
• We are seeing a slight increase in real estate and finance transactions.
• Market and economy are top priorities.
• Health care and liability insurance costs significantly impact our business prospects.
• We continue to receive business inquiries and new contracts, although we are experiencing delays in accounts receivable. We spend more time trying to convince some customers to pay. They do eventually pay, but it takes longer.
• We continue to see delays in purchasing decisions. We’ve come to the conclusion that some of this may be due to a fragmented decision-making process within our client companies. Whereas decisions used to be made in a group setting, with more workers being distributed among themselves, these conversations are now a series of one-on-one conversations. These conversations take a significant amount of additional time, and in each conversation, they may decide to delay or cancel a project, but all conversations must be positive for approval.

Administrative and support services

• The biggest problem that prevents companies from doing much, in my opinion, is politics.
• We cannot hire in the wage bracket in which we compete.
• As a search and recruitment firm that recruits not only in North Texas but throughout Texas and the United States, we have felt like we have been in a slump now for several months. Executive vice presidents of talent acquisition at 40,000-employee companies told us privately that they don’t fill jobs when current employees leave. Fortune 100 companies have imposed hiring freezes. Midsize companies are posting fake jobs for candidates waiting to hire again, since they’re not allowed to fill the jobs they post. Customers are taking longer to pay their bills, and the few employees who are hiring are taking longer to make decisions. I have already eliminated one job and am cutting wages for my remaining employees. Please lower interest rates. I am very concerned that you are already behind. But we have to try to get the economy back on track.
• We are concerned about interest rates and their impact on real estate and business activity in general. Financial performance remains strong for companies that do not rely heavily on leverage.

Educational services

• Higher education enrollment patterns in Texas are finally starting to mirror national trends, with college enrollment declining. While it’s too early to predict, we expect this decline to accelerate, leading to increased uncertainty and lower revenues in the coming year.

Outpatient healthcare services

• Customers are having difficulty finding the funds to pay for our services.
• Some people think that interest rates are a bit high.
  
  Many borrowers are in pain and sighing.
  
  We appeal for grace
  
  Bring prices to their place
  
  Where capital formation does not lead to a cry!

Texas Retail Outlook Survey

Entertainment, gambling and recreation industries

• The weather has been the real negative for our business.

stay

• In the 15 years I have been at this location, this summer has been the worst I have ever had to work in my area (excluding the Covid pandemic). There are many factors contributing to this, including construction in the area and a lack of mass market work.

Food and Drink Services

• Revenue continues to suffer largely due to the poor return to office sentiment compared to reports of improved office occupancy. The same is true for business travel Monday through Thursday. There are also clear signs of customers pulling back on our higher prices due to continued increases in commodity price and wage pressures.
• Rising utility bills, insurance and property taxes, plus the fear of a recession, are changing my clients’ buying habits.

Wholesalers and Durable Goods

• A lot depends on the election and what happens next!

Car and spare parts dealers

• The selling price of each new and used vehicle has not changed. However, the volume has increased significantly. With the possibility of lower interest rates, We are optimistic about increasing unit volumes over the next six months.H.S.
• New and used car sales continue to decline.
• August was very quiet, even quieter than usual. We usually see some slowdown as we start back to school, but not to this extent.

Food and Drink Services

• Easing credit conditions are leading to renewed expansion planning as the company looks to new markets and measured expansion into existing ones. Labor supply appears to have increased, resulting in slightly longer hiring periods and lower turnover. The massive fiscal irresponsibility at the federal level is an ongoing concern and will continue to depress leverage and growth.