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
July 1, 2014

Texas Service Sector Activity Strengthens

Texas service sector activity picked up pace 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, rose from 13.1 to 16.9.

Labor market indicators improved this month. The employment index edged up from 13.8 to 16.5 in June, indicating employment rose at a slightly faster pace than in May. The hours worked index rose slightly from 4.9 to 7.3.

Perceptions of broader economic conditions reflected more optimism in June. The general business activity index surged more than 10 points to 21.1. The company outlook index advanced from 8.7 to 17, with 23 percent of respondents reporting that their outlook improved from last month and 6 percent noting it worsened.

Price and wage pressures increased this month. The selling prices index rose from 8 to 11.7, indicating prices increased at a faster pace than in May. The wages and benefits index moved up from 17 to 20.8, although the great majority of firms continued to note no change in compensation costs.

Respondents’ expectations regarding future business conditions reflected more optimism in June. The index of future general business activity moved up almost 5 points to 28.7. The index of future company outlook rose from 22.9 to 29.1. Indexes of future service sector activity, such as future revenue and employment, also reflected more optimism this month.

Texas Retail Outlook Survey

July 1, 2014 

Retail Activity Expands and Business Conditions Improve

Retail Activity Expands and Business Conditions Improve

Retail sales increased for the 12th consecutive month in June, according to business executives responding to the Texas Retail Outlook Survey. The sales index held steady at 16, indicating sales rose at the same pace as in May. Inventories rose at a slower pace than last month.

Labor market indicators improved this month. The employment index jumped 11 points to 19.5, indicating retail jobs grew at a faster pace than in May. After dipping into negative territory last month, the hours worked index advanced to 4.5, suggesting longer workweeks, although the great majority of firms continued to note no change.

Retailers’ perceptions of broader economic conditions reflected more optimism in June. The general business activity index surged to a nine-month high of 30.3. The company outlook index climbed 19 points to a multiyear high of 30.3, with 35 percent of respondents noting an improved company outlook over the prior month, compared with 5 percent reporting their outlook had worsened.

Retail price pressures eased, while wage pressures increased this month. The selling prices index ticked down from 19.6 to 17.8. The wages and benefits index edged up from 12 to 14.3, although the great majority of firms noted no change in labor costs.

Retailers’ perceptions of future broader economic conditions reflected more optimism in June. The future general business activity index moved up 7 points to 32.7. The index of future company outlook rose from 29.4 to 35.8. Indexes of future retail sector activity also reflected more optimism this month.

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 17–25, and 244 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 29, 2014

Texas Service Sector Outlook Survey

July 1, 2014
 

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
16.9
13.1
+3.8
Increasing
56
31.6
53.7
14.7
Employment
16.5
13.8
+2.7
Increasing
52
23.6
69.3
7.1
Part-time employment
6.1
3.4
+2.7
Increasing
8
10.4
85.3
4.3
7.3
4.9
+2.4
Increasing
5
11.1
85.1
3.8
Wages and benefits
20.8
17.0
+3.8
Increasing
61
22.7
75.4
1.9
Input prices
24.0
29.6
-5.6
Increasing
62
26.3
71.4
2.3
Selling prices
11.7
8.0
+3.7
Increasing
43
16.0
79.7
4.3
Capital expenditures
14.1
16.3
-2.2
Increasing
58
20.4
73.4
6.3
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
17.0
8.7
+8.3
Improving
34
23.2
70.6
6.2
General business activity
21.1
10.3
+10.8
Improving
32
28.6
63.9
7.5
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
50.6
44.7
+5.9
Increasing
64
57.3
36.0
6.7
Employment
34.5
33.5
+1.0
Increasing
63
37.6
59.4
3.1
Part-time employment
13.4
12.0
+1.4
Increasing
24
18.7
76.0
5.3
8.4
9.3
-0.9
Increasing
7
13.2
82.0
4.8
Wages and benefits
42.9
38.7
+4.2
Increasing
90
43.9
55.1
1.0
Input prices
46.5
43.8
+2.7
Increasing
90
48.2
50.0
1.7
Selling prices
28.8
23.4
+5.4
Increasing
62
34.3
60.2
5.5
Capital expenditures
32.3
27.9
+4.4
Increasing
63
38.8
54.8
6.5
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
29.1
22.9
+6.2
Improving
34
34.1
60.9
5.0
General business activity
28.7
24.2
+4.5
Improving
33
35.5
57.7
6.8

*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

July 1, 2014
 

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
16.0
16.4
-0.4
Increasing
12
33.1
49.7
17.1
Employment
19.5
8.2
+11.3
Increasing
35
25.1
69.3
5.6
Part-time employment
1.8
4.1
-2.3
Increasing
7
7.5
86.8
5.7
Hours worked
4.5
-5.4
+9.9
Increasing
1
10.1
84.3
5.6
Wages and benefits
14.3
12.0
+2.3
Increasing
40
17.6
79.1
3.3
Input prices
13.2
24.8
-11.6
Increasing
47
16.9
79.4
3.7
Selling prices
17.8
19.6
-1.8
Increasing
23
19.9
78.0
2.1
Capital expenditures
3.6
15.7
-12.1
Increasing
8
10.7
82.1
7.1
Inventories
16.1
19.8
-3.7
Increasing
29
26.5
63.1
10.4
Companywide Retail Activity
Sales
20.0
11.5
+8.5
Increasing
37
35.2
49.6
15.2
Internet sales
5.0
7.9
-2.9
Increasing
5
10.0
85.0
5.0
Catalog sales
0.0
-6.3
+6.3
No Change
1
6.1
87.9
6.1
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
30.3
11.3
+19.0
Improving
14
35.1
60.1
4.8
General business activity
30.3
10.7
+19.6
Improving
14
39.3
51.7
9.0
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
42.9
41.2
+1.7
Increasing
64
53.1
36.7
10.2
Employment
26.3
10.9
+15.4
Increasing
54
37.3
51.7
11.0
Part-time employment
2.0
10.2
-8.2
Increasing
12
18.3
65.4
16.3
Hours worked
4.2
11.3
-7.1
Increasing
27
13.1
78.0
8.9
Wages and benefits
40.7
34.2
+6.5
Increasing
66
44.5
51.7
3.8
Input prices
37.7
34.1
+3.6
Increasing
62
41.5
54.7
3.8
Selling prices
39.6
34.8
+4.8
Increasing
62
43.4
52.8
3.8
Capital expenditures
24.6
24.0
+0.6
Increasing
39
34.0
56.6
9.4
Inventories
25.0
15.8
+9.2
Increasing
55
37.8
49.4
12.8
Companywide Retail Activity
Sales
38.7
37.2
+1.5
Increasing
63
49.8
39.1
11.1
Internet sales
34.2
28.5
+5.7
Increasing
63
34.2
65.8
0.0
Catalog sales
7.6
21.1
-13.5
Increasing
8
8.8
90.0
1.2
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
35.8
29.4
+6.4
Improving
63
39.0
57.8
3.2
General business activity
32.7
25.6
+7.1
Improving
33
35.1
62.5
2.4

*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

July 1, 2014

TSSOS Chart

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

 

Texas Retail Outlook Survey

July 1, 2014

TSSOS Chart

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

Texas Service Sector Outlook Survey

July 1, 2014

Comments from Survey Respondents

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

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

  • Recent rains have improved the outlook for agriculture and cattle. Employment and construction are steady, while housing starts and average sale prices are down slightly.

Broadcasting (except Internet)

  • We are a media company that owns TV and radio in a midsized market. We were surprised by soft demand for TV advertising in June; it looks like July will recover a little of that loss, but we expect high demand throughout the rest of the year. In radio, we had high demand for June, and we expect continued high demand through the rest of the year.

Rental and Leasing Services

  • It would certainly help business planning if accounting and tax rules that will apply to us for 2014 were determined now, such as bonus depreciation.

Professional, Scientific and Technical Services

  • The DFW real estate market continues to outpace 2013. This growth is being fueled by the influx of people moving into our area. Home builders and apartment developers are having a difficult time keeping up with the demand for housing, and this is causing prices and rents to rise quickly. Commercially, new office buildings are being developed to keep up with the demand for office space. As long as interest rates stay at these levels, we feel this market will continue to improve.
  • Energy costs could change everything.
  • Our part-time workers are all interns. Business feels stronger this month, and we hope it sticks.
  • We are becoming more concerned in a macroeconomic sense watching developments abroad. While this could help our North American energy business, activities that stall GDP growth could have negative implications no doubt to business levels in other markets.

Management of Companies and Enterprises

  • Government regulation is running up our costs and hurting our ability to help our customers.
  • Continued regulatory burden is translating into a huge additional cost structure for our business and that of our customers. Some customers are giving up and selling out or refusing to do any needed expansion until they have a clearer understanding of what the playing field is going to look like.

Administrative and Support Services

  • Our revenues will be increasing and our staff growing because of what our organization can provide, not due to the economy. The scale of our operation will allow us to align ourselves with larger contracted price work in our industry.
  • The mood on the purchase of travel has moved towards a much more cautious and delayed commitment.
  • We see continued possibilities to increase business as other businesses locate in the areas we service. However, there is still strong competition, limiting pricing flexibility and increasing economic uneasiness. Price increases are met with the probability of rebidding the service or product.

Ambulatory Health Care Services

  • We have opted out of seeing Affordable Care Act patients to date. We are receiving complaints from referring physicians who have elected to take care of these patients. Many of these patients are not paying the premiums. After 90 days, the payments are being clawed back and the physicians are told to bill the patient. It is a disaster. Patients appear to be signing up for urgent care, receiving the care and then neglecting to pay the premiums. We are certain that there is much more to come. The cost of living in Houston continues to rise, but we are unable to pay our employees more. Shelter, medical, food and fuel costs continue to rise despite the fact that we have no inflation. Thank goodness we are in Texas where the economy remains relatively robust for now.

Hospitals

  • The health care industry continues to put pressure on rural hospitals to reduce costs. Increasing regulations and declining reimbursements will stress the cash limits of the smaller rural Texas hospitals.

Food Services and Drinking Places

  • June has bounced back from a slow May, but the fiscal year has seen a sales increase; however, the sales increase is less than the price increases we have taken so we are, in an absolute sense, down. We do not see much to indicate any significant change. Average hours worked edged up with the end of the school year a couple of weeks ago, but we still have not had much pressure to increase the number of employees or wages. Cost of goods sold remained flat for another period, but we still expect increases later in the year. Our capital expenses are up right now because we are opening a new restaurant in a property we already own, and we are remodeling one other property. We will fall back to more normal capital expenditure levels within a month. There could be another capital expenditure surge for another new unit toward the very end of the six-month horizon.
  • We opened a new location in June, which will increase our noncomp revenues. We will have an additional location open in early 2015. We also give raises and increase prices in January each year and may have to increase prices more to cover costs from the Affordable Care Act.

Merchant Wholesalers, Durable Goods

  • Our increases and decreases are seasonal.
  • Tax law changes had a big negative effect on sales; we generated more leasing to offset write-off losses. If this actually gets reinstated, it will help sell asset replacements.

Merchant Wholesalers, Nondurable Goods

  • We have seen the largest increase in orders from our customers for the remainder of the year since 2007.

Motor Vehicle and Parts Dealers

  • Past months have been good, so we are trying to maintain that same level.
  • June sales are down slightly on a daily sales rate basis. However, overall business continues to hold at a strong level. There is a lot of pent-up demand due to several years of very slow unit sales, and our industry is now benefiting greatly from that demand. The Houston economy is exceptionally strong, and our car and light truck sales are outpacing national norms.

Building Material and Garden Equipment and Supplies Dealers

  • We are cautiously optimistic. We are still running very conservatively as we have a lot of ground to make up from previous years.
  • Things slowed a little, but with interest rates low, everyone seems to be thinking it will pick up in coming months.

Food and Beverage Stores

  • We are now expecting some minor increases in food costs over the next few months. The rate of change on wage inflation is moderating.

 

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