- Prior was -12.4%
- Revenue +9.5 vs +9.4 prior
- Employment +14.5 vs +7.6 prior
- Wages +28.0 vs +34.6 prior
- Capex +16.4 vs +12.1 prior
- Outlook -5.2 vs -14.7 prior
- Six month revenue +35.3 vs +19.0 prior
- Six month general outlook +2.5 vs -18.4 prior
- Retail sales -19.4 vs -11.0 prior
- Retail outlook -16.5 vs -22.2 prior
This is a low-tier indicator but it's surprisingly positive on a number of fronts, particularly the outlook measures.
Selected comments:
Real estate -
Besides higher interest rates, inflation and a lack of inventory still, the unrelenting heat is affecting the mindset of buyers. [There are] dead trees and grass and [they have] no desire to be outside.
The increase in interest rates and overall inflation of energy, food and housing is hitting families. The cost of warehouse space and employee wages is hitting businesses small and large. The economy is out of control, but it will correct
Employee retention, construction costs, material and equipment shortages, and the availability of utilities to provide services or equipment continue to persist and delay the delivery of projects and increase costs at all levels.
Inflation and interest rates have clients evaluating the timing to buy.
Professional, Scientific and Technical Services
New queries have slowed down.
Because of our significant backorder situation due to supply-chain issues, it is hard to accurately predict our July revenue right up until the last minute when we know what is going to ship, but we are seeing multiple items that had been severely backordered start shipping. Due to this, we anticipate a better August, so it seems there may be some light at the end of this tunnel.
The volume of work is showing some slight slowdown exceeding normal seasonal slowing. Large projects are likely seeing some pullback because of increased interest rates.
We are expecting a softening in demand for engineering services in 2023 following a normal business cycle.
Administrative and Support Services
The current level of business activity and the financial performance of clients bear little resemblance to the media headlines regarding the economy. The main focus is on hiring, training and retaining people and a perceived level of uncertainty (but no real evidence to support the level of uncertainty).
We are still trying to catch up with inflation. I can't increase my prices fast enough, and we have had layoffs but at the same time are feeling the pressure to increase the wages of those left or we will lose them. It feels like a toxic combination that can only end in recession.
Amusement, Gambling and Recreation Industries
It is nearly impossible to hire employees part time. We cannot even hire full-time employees.
Accommodation
Inflation appears to be negatively impacting leisure travel, resulting in lower occupancies and rates
For consumers, many factors are in play: inflation, gas prices, disposable income. It is very hard to say with any certainty what will happen in the near term. What is happening today is a softening of demand; therefore, our ability to drive pricing is minimal at best.
Food Services and Drinking Places
July is a terrible month for us. August [usually] improves (for us) because we participate in Houston Restaurant Weeks. Prices, in some cases, are coming down. The weather has been awful, and it has been difficult to keep the restaurants cool.
Merchant Wholesalers, Durable Goods
We are still experiencing major supply-chain problems, and the supply of semiconductors remains a key challenge.
Merchant Wholesalers, Nondurable Goods
We are still seeing supply-chain issues (orders delayed, orders underfilled, etc.), but the frequency and degree of pain is lessening. Where the pain meter has been sitting at an 8 for the last 18 months, I would put it at a 7 [now]. Not a huge change, but the trend is moving in the right direction in the food supply chain.
Motor Vehicle and Parts Dealers
Supply-chain issues, particularly chips, continue to adversely affect the automobile business. Until these issues start to resolve themselves, I don't expect our business to improve much.
You [the Federal Reserve] are overshooting rates like you always do. Keep it up and watch this economy crash and burn.
