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Texas Service Sector Activity Increases at a Slower Pace in March, Says Dallas Fed Survey

For immediate release: March 29, 2016

DALLAS—Texas service sector activity continued to reflect expansion in March, according to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey (TSSOS).

The revenue index—a key measure of state service sector conditions—moved down from 9.7 to 6.4, indicating activity increased but at a slower pace than in February.

The survey is conducted monthly by the Dallas Fed to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state economy and employs close to 8.2 million workers.

Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.

The employment index was similar to last month but up slightly to 1.1. The hours worked index edged up 2 points to 3.3.

Perceptions of broader economic conditions were mixed in March. The general business activity index remained negative for a third consecutive month but rose sharply from –19.2 to –3.8. After two consecutive negative readings, the company outlook index advanced into positive territory to a reading of 3.1.

Expectations regarding future business conditions improved in March. After two consecutive months in negative territory, the index of future general business activity climbed to 1.5. The index of future company outlook rose from a reading near zero to 9.9. Indexes of future service sector activity, such as future revenue and employment, remained in solid positive territory this month.

TSSOS also includes a component called the Texas Retail Outlook Survey, which uses information from respondents in the retail and wholesale sectors only.

Retail sales continued to contract in March, according to business executives responding to the Texas Retail Outlook Survey. The sales index remained negative but edged up from –5.1 to –3.1.

Retailers’ perceptions of broader economic conditions were mixed this month. The general business activity index surged 26 points to a reading of zero. The company outlook index rebounded from negative territory to 6.4.
Indexes of future retail sector activity reflected more optimism this month.

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Media contact:
Justin Jones
Federal Reserve Bank of Dallas
Phone: (214) 922-5449
Email: justin.jones@dal.frb.org