FRB Dallas Home » Research & Data » Texas Business Outlook Surveys » Texas Service Sector Outlook Survey
 
 

Research & Data

  • Current Report
  • Results Table
  • Revenue/Sales Charts
  • Comments
  • Historical Data

Texas Service Sector Outlook Survey

Report in PDF
June 25, 2013

Texas Service Sector Activity Expands, But at a Slower Pace

Growth in Texas service sector activity slowed in June, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, remained positive but fell 5 points to 6.8.

Labor market indicators were mixed. The employment index edged down from 6.8 to 4, suggesting the pace of hiring slowed. The hours worked index declined from 4.5 to -0.6, and the near zero reading indicates that average workweeks were relatively unchanged from May.

Perceptions of broader economic conditions reflected more optimism in June. The general business activity index advanced from 3.8 to 12.2. The company outlook index rose slightly from 2.2 to 3.4, with 16 percent of respondents reporting that their outlook improved from last month and 13 percent noting it worsened.

Price and wage pressures increased slightly in June. The selling prices index edged up from 3.8 to 5.5, indicating prices increased at a faster pace. The wages and benefits index ticked up from 14.1 to 15.7, although the great majority of firms continued to note no change in compensation costs.

Respondents’ expectations regarding future business conditions reflected more optimism this month. The index of future general business activity moved up from 16.9 to 20, and the index of future company outlook jumped almost 10 points to 22.9. Indexes of future service sector activity, such as future revenue and employment, also reflected more optimism in June.

Texas Retail Outlook Survey

June 25, 2013 

Retail Sales Decline

Retail Sales Decline

Retail sales fell in June, according to business executives responding to the Texas Retail Outlook Survey. The sales index plunged over 15 points back into negative territory to -4.1. Inventories rose.

Labor market indicators were mixed. The employment index was similar to May with a reading of 4, indicating hiring continued at the same pace as last month. The hours worked index dropped from -2.7 to -9.2, its lowest reading in a year.

Retailers’ perceptions of broader economic conditions continued to reflect optimism in June. The general business activity index rose slightly from 1.3 to 4.8. The company outlook index dipped from 6.2 to 4.3, with 18 percent of respondents noting an improved company outlook over the prior month, compared with 14 percent reporting their outlook had worsened.

Retail price pressures eased, while wage pressures increased. The selling prices index edged down from 9.7 to 8.2, indicating prices increased at a slower pace in June. The wages and benefits index surged 10 points to 17.2, although the great majority of firms noted no change in labor costs.

Perceptions of future broader economic conditions were less optimistic in June. The future general business activity index fell from 22.1 to 18.3, while the index of future company outlook declined 3 points to 16.5. Indexes of future retail sector activity increased and remained in solid positive territory in June.

The Texas Retail Outlook Survey (TROS) is a component of the TSSOS that uses information only from respondents in the retail and wholesale sectors.

The Dallas Fed conducts the Texas Service Sector Outlook Survey monthly to obtain a timely assessment of the state’s service sector activity. Data were collected June 11–19, and 224 Texas business executives responded to the survey. Firms are asked whether revenue, employment, prices, general business activity and other indicators increased, decreased or remained unchanged over the previous month.

Survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of firms reporting an increase exceeds the share reporting a decrease, the index will be greater than zero, suggesting the indicator has increased over the prior month. If the share of firms reporting a decrease exceeds the share reporting an increase, the index will be below zero, suggesting the indicator has decreased over the prior month. An index will be zero when the number of firms reporting an increase is equal to the number of firms reporting a decrease. Data have been seasonally adjusted as necessary.

Next release: July 30, 2013

Texas Service Sector Outlook Survey

June 25, 2013
 

Click on links in the table for greater details. Historical data are available from January 2007 to the most current release month.

Business Indicators Relating to Facilities and Products in Texas
Current (versus previous month)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Increase
%
Reporting
No Change
%
Reporting
Decrease
Revenue
6.8
11.8
-5.0
Increasing
44
29.0
48.7
22.2
Employment
4.0
6.8
-2.8
Increasing
40
16.4
71.2
12.4
Part-time employment
2.1
4.0
-1.9
Increasing
5
9.0
84.1
6.9
-0.6
4.5
-5.1
Decreasing
1
7.2
85.0
7.8
Wages and benefits
15.7
14.1
+1.6
Increasing
49
18.8
78.1
3.1
Input prices
21.8
23.4
-1.6
Increasing
50
24.1
73.6
2.3
Selling prices
5.5
3.8
+1.7
Increasing
31
14.0
77.5
8.5
Capital expenditures
7.5
9.1
-1.6
Increasing
46
15.3
77.0
7.8
General Business Conditions
Current (versus previous month)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Improved
%
Reporting
No Change
%
Reporting
Worsened
Company outlook
3.4
2.2
+1.2
Improving
21
15.9
71.6
12.5
General business activity
12.2
3.8
+8.4
Improving
20
21.0
70.2
8.8
Business Indicators Relating to Facilities and Products in Texas
Future (six months ahead)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Increase
%
Reporting
No Change
%
Reporting
Decrease
Revenue
37.9
33.5
+4.4
Increasing
52
50.2
37.5
12.3
Employment
17.6
16.7
+0.9
Increasing
49
29.7
58.2
12.1
Part-time employment
7.1
5.7
+1.4
Increasing
12
14.3
78.5
7.2
5.7
2.6
+3.1
Increasing
46
11.3
83.1
5.6
Wages and benefits
37.1
33.5
+3.6
Increasing
78
40.1
56.9
3.0
Input prices
44.1
49.4
-5.3
Increasing
78
46.4
51.3
2.3
Selling prices
25.4
20.8
+4.6
Increasing
50
32.2
61.0
6.8
Capital expenditures
13.6
14.9
-1.3
Increasing
51
25.6
62.3
12.0
General Business Conditions
Future (six months ahead)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Improved
%
Reporting
No Change
%
Reporting
Worsened
Company outlook
22.9
13.4
+9.5
Improving
22
31.2
60.5
8.3
General business activity
20.0
16.9
+3.1
Improving
21
27.7
64.6
7.7

*Indicator direction refers to this month's index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.
**Number of months moving in current direction.
Data have been seasonally adjusted as necessary.

Texas Retail Outlook Survey

June 25, 2013
 

Click on links in the table for greater details. Historical data are available from January 2007 to the most current release month.

Business Indicators Relating to Facilities and Products in Texas, Retail
Current (versus previous month)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Increase
%
Reporting
No Change
%
Reporting
Decrease
Retail Activity in Texas
Sales
-4.1
11.6
-15.7
Decreasing
1
25.3
45.2
29.4
Employment
4.0
4.7
-0.7
Increasing
23
15.3
73.4
11.3
Part-time employment
-1.8
0.0
-1.8
Decreasing
1
7.1
83.9
8.9
Hours worked
-9.2
-2.7
-6.5
Decreasing
3
2.8
85.2
12.0
Wages and benefits
17.2
6.8
+10.4
Increasing
28
20.1
77.0
2.9
Input prices
13.3
16.1
-2.8
Increasing
48
18.9
75.5
5.6
Selling prices
8.2
9.7
-1.5
Increasing
11
17.4
73.5
9.2
Capital expenditures
-1.7
5.8
-7.5
Decreasing
1
13.8
70.7
15.5
Inventories
2.5
0.8
+1.7
Increasing
13
21.8
58.9
19.3
Companywide Retail Activity
Sales
2.5
5.8
-3.3
Increasing
25
26.5
49.4
24.0
Internet sales
2.5
3.6
-1.1
Increasing
2
17.1
68.3
14.6
Catalog sales
-13.2
-6.0
-7.2
Decreasing
3
7.9
71.1
21.1
General Business Conditions, Retail
Current (versus previous month)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Improved
%
Reporting
No Change
%
Reporting
Worsened
Company outlook
4.3
6.2
-1.9
Improving
2
18.1
68.1
13.8
General business activity
4.8
1.3
+3.5
Improving
2
19.5
65.8
14.7
Business Indicators Relating to Facilities and Products in Texas, Retail
Future (six months ahead)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Increase
%
Reporting
No Change
%
Reporting
Decrease
Retail Activity in Texas
Sales
35.9
25.2
+10.7
Increasing
52
48.4
39.1
12.5
Employment
16.8
10.6
+6.2
Increasing
42
27.1
62.6
10.3
Part-time employment
-2.7
0.5
-3.2
Decreasing
1
9.7
77.9
12.4
Hours worked
9.6
-1.0
+10.6
Increasing
1
15.4
78.8
5.8
Wages and benefits
29.8
24.0
+5.8
Increasing
54
33.1
63.6
3.3
Input prices
41.1
31.9
+9.2
Increasing
50
42.9
55.4
1.8
Selling prices
30.4
30.3
+0.1
Increasing
50
37.5
55.4
7.1
Capital expenditures
1.8
9.1
-7.3
Increasing
27
17.9
66.1
16.1
Inventories
23.0
11.1
+11.9
Increasing
43
35.4
52.2
12.4
Companywide Retail Activity
Sales
32.3
28.4
+3.9
Increasing
51
39.7
52.9
7.4
Internet sales
22.5
18.0
+4.5
Increasing
51
27.5
67.5
5.0
Catalog sales
11.5
5.5
+6.0
Increasing
13
18.1
75.3
6.6
General Business Conditions, Retail
Future (six months ahead)
Indicator Jun
Index
May
Index
Change Indicator
Direction*
Trend**
(months)
%
Reporting
Improved
%
Reporting
No Change
%
Reporting
Worsened
Company outlook
16.5
19.7
-3.2
Improving
50
23.4
69.7
6.9
General business activity
18.3
22.1
-3.8
Improving
21
26.0
66.3
7.7

*Indicator direction refers to this month's index. If index is positive (negative), indicator is increasing (decreasing) or improving (worsening). If zero, indicator is unchanged.
**Number of months moving in current direction.
Data have been seasonally adjusted as necessary.

Texas Service Sector Outlook Survey

June 25, 2013

TSSOS Chart

Downloadable TSSOS chart: Low-res (72 dpi) | Hi-res (300 dpi)

 

Texas Retail Outlook Survey

June 25, 2013

TSSOS Chart

Downloadable TROS chart: Low-res (72 dpi) | Hi-res (300 dpi)

Texas Service Sector Outlook Survey

June 25, 2013

Comments from Survey Respondents

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

Credit Intermediation and Related Activities

  • Over the next six months, we will be preparing for all the regulatory changes in the various areas of the industry. This will cost us time that we could be using to attempt to attract new services. We are concerned that the regulatory burden may negatively impact our ability to provide good banking services to customers.
  • Future improvements are expected to be small.
  • A few of our staff are leaving. We are not planning to replace them.

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

  • In the major cost areas, there is still a lot of indecision and uncertainty. We think new regulations and laws are not creating a good business atmosphere.

Insurance Carriers and Related Activities

  • Due to a much quicker than expected increase in interest rates on mortgages, business activity is expected to slow for a few months, and refinance activity is expected to drop dramatically. Sales activity should remain strong but will be slightly affected, mainly for some of the move-up buyers.

Rental and Leasing Services

  • All of our positive comments about growth are due to a large acquisition we just completed. The only reason that opportunity was available was because the company we acquired got in trouble in this economy.

Professional, Scientific, and Technical Services

  • There has been definite improvement in our business trend line from March through May, especially on the domestic front, and we are hopeful June will continue the positive trend. We expect work to taper in July and August and then rebound September through November before it tails off again. We are watching improvements in the U.S. economy but remain concerned about Europe and China.
  • Although the residential sector of the real estate market has been leading the way in 2013, the commercial sector is now showing signs of catching up. Our residential revenue is up 36.5 percent over 2012, and commercial revenue is up 20 percent over 2012. The commercial division normally doesn't heat up until the second half of the year, but we have seen a significant increase in revenue and orders in April, May and June over 2012. The commercial market is being led by refinances, but sales transactions and development remain strong as well. We have remained cautious about hiring and capital expenditures due to the economic issues that the country is facing. We feel that low interest rates are driving this market, but the rising 10-year treasury rate could have a major impact.
  • Oil and gas pipelines are driving our growth. New taxes and health care costs are driving our net profits down.
  • Projects are sporadic and unstable both in scheduling and financing.
  • Our increase in part-time employees is due to 15 college interns joining the firm for the summer. Business is decent, but everyone is still cautious. Budgets are tight across the board.

Management of Companies and Enterprises

  • Regulation is hurting our business and costing our customers more, and most of the regulations seem to hurt our lower income customers more than the other customers.

Administrative and Support Services

  • We are introducing a new product that we expect will increase our reimbursements during the rest of this year and beyond.
  • We continue to bring on new customers but have experienced losses in the medical sector of our business as hospitals cut back. The market is still very price-sensitive, reflecting uneasiness in our customer base in general about future business growth.
  • There has been a continuing pattern the last four months of few full-time and contract job openings. Clients are very tentative and slow to act even though there is a genuine shortage of qualified IT people.

Ambulatory Health Care Services

  • Health care provider and service companies have increasing operations costs from health insurance and decreasing revenue due to payment cuts for health care providers.
  • We saw a fairly sharp drop in revenues in the last bit of May and first week of June, probably coinciding with the end of the school year. Business firmed up the second week of June. We eliminated one position through attrition that will probably not be filled in the future.
  • We believe patient benefits have decreased in recent years while copays and deductibles skyrocket, and only insurance companies are benefiting.

Nursing and Residential Care Facilities

  • Uncertainty about the true impact of health reform and increasing regulatory burdens serve to depress the health care economy. The next three to five years will be rough on doctors and hospitals.

Water Transportation

  • Business remains anemic, with no change over the last several months. More consistent policy would be helpful because it would lead to less uncertainty.

Food Services and Drinking Places

  • We are finishing our fiscal year and have just moved to positive sales on a same-store basis for the first time since last December. Our outlook is cautiously positive. Sales are up very slightly, but the increase is so small that it does not generate any need for additional labor or longer hours. It just pushed us from slightly down to slightly up.
  • We are still basing business decisions on the possible effects of the Affordable Care Act to our business in 2013–14.
  • All of our growth is coming from new locations.

Merchant Wholesalers, Durable Goods

  • The decline and volatility of commodity prices, especially metals, seem to be affecting our business activity.

Motor Vehicle and Parts Dealers

  • Some new buying interest is showing up. We believe it is due to more confidence.

Building Material and Garden Equipment Supplies Dealers

  • Quoting activity declined drastically in early May. Contracts have now followed suit. The pattern over the last 12 to 18 months has been a cycle of two to three good months followed by two to three poor months.

 

Texas Service Sector Outlook Survey

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.

Texas Service Sector Outlook Survey
 
Texas Retail Outlook Survey
Unadjusted excel   Unadjusted excel
Seasonally adjusted excel   Seasonally adjusted excel

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.

Texas Service Sector Outlook Survey
 
Texas Retail Outlook Survey
Unadjusted excel   Unadjusted excel
Seasonally adjusted excel   Seasonally adjusted excel

Questions regarding the Texas Service Sector Outlook Survey can be addressed to Amy Jordan at amy.jordan@dal.frb.org.

Sign up for our free email alert to be automatically notified as soon as the latest Texas Service Sector Outlook Survey is released on the web.

 

Federal Reserve Bank of Dallas Seal
Federal Reserve Bank of Dallas

2200 N. Pearl St., Dallas, Texas 75201 | 214.922.6000 or 800.333.4460
Disclaimer / Privacy Policy

Federal Reserve Centennial