“Nothing Is Getting Better” – Texas Services Sector Outlook Slumps, Prices Soar

Following yesterday’s slump in a survey of Texas Manufacturing firms, the Dallas Fed released their survey of Texas Services sector firms today, and it was just a big a shitshow.

Perceptions of broader business conditions deteriorated further in April. The general business activity index dropped eight points to -19.4. In addition, outlooks worsened as the company outlook index retreated to a 34-month low of -15.5. The outlook uncertainty index jumped 13 points to 40.5 – its highest level since mid-2022. 

Respondents’ expectations regarding future business activity continued to weaken in April.

Under the hood, we saw further stagflationary signals with revenue forecast plunging as prices soar…

Tariffs were top of mind for many, just as with the Texas Manufacturing survey, as respondents broadly speaking reflected: “Nothing is getting better.”

• [Our concerns are] tariffs, tariffs, tariffs.

• We have high levels of anxiety as a result of the fast-moving changes in government restructuring and tariff policies. Although we are hoping for the best end results, the overall business environment is very volatile.

• Our major concern is the effect of tariffs.

• [We are concerned about] tariff uncertainty and price increases, mostly related to products from China; plus, we are experiencing longer lead times for orders.

• Potential supply chain impacts of proposed tariffs are being evaluated industrywide.

• All of the uncertainty is slowing private business.

• Tariffs are bringing a high level of uncertainty to our business. It is hard to tell what will happen in one week, let alone six months

• The on-again, off-again psychodrama in Washington with respect to tariffs is upsetting to almost the entirety of the business community. If the unprecedented tariffs continue, the commercial real estate and construction industries will slow to a halt soon.

• The current tariffs in effect will increase our cost of goods due to increased produce prices and certain imported proteins.

• The almost daily shifts on tariffs create havoc.

• People are acting almost in a panic about the economy.

• Tariffs [are a concern].

• We are highly concerned about a downturn in activity from a recession caused by the tariffs.

• [We are] devastated. We are a trucking company specializing in transporting international shipping containers, and there is no other word that captures what we are facing.

• We are becoming increasingly pessimistic.

• We are experiencing an unexpected decline in business activity. I see customers becoming more price sensitive and cutting back on general expenditures.

And finally, ‘chaos’, ‘erratic’, and ‘turmoil’ at The White House summed up many people’s perspectives:

• President Donald Trump has a very chaotic style of dealing with the economy.

• Erratic leadership style in Washington has led to high levels of uncertainty impacting decision making and spending.

• The insane chaos that is running the White House makes it impossible to plan anything.

• Daily instability in D.C. continues to create chaos.

• The randomness of our current president is causing paralysis.

• Uncertainty in the markets is a killer. Erratic behavior of leadership is even worse.

• We are devoting so much time to mitigating the chaos this administration is creating that we have little time left to run our business.

Not a pretty picture… and remember, this is Texans.

However, we did find one silver lining comment:

• I’m not too worried about the new tariffs. I think other countries will soon be negotiating with President Trump, and six months from now the national discussion will have moved on.

Is there hope?

“Consumers are on the fence. This will turn eventually.”