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Texas Service Sector Activity Expands at a Slower Pace in February, Says Dallas Fed Survey

For Immediate Release: Feb. 28, 2017

DALLAS—Texas service sector activity expanded in February but at a slower pace, 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— dipped 2 points to 14.1 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 about 8.4 million workers.

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

Labor market indicators reflected faster employment growth and longer workweeks this month. The employment index rose slightly from 4.8 to 5.9. The hours worked index edged up 2 points to 6.9.

Perceptions of broader economic conditions reflected less optimism in February. The general business activity index fell from 21.2 to 15.6. The company outlook index fell 6 points to 12.0.

Expectations regarding future business conditions reflected slightly less optimism in February. The index of future general business activity moved down from 36.2 to 31.5. The index of future company outlook fell slightly from 33.0 to 29.6. Indexes of future service sector activity, such as future revenue and employment, continued to reflect optimism 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 grew in February, according to business executives responding to the Texas Retail Outlook Survey. The sales index came in at 6.9 in February, largely unchanged from January.

Retailers’ perceptions of broader economic conditions reflected less optimism in February. The general business activity index retreated from 21.8 to 8.4. The company outlook index fell 3 points to 13.1.

Retailers’ perceptions of future broader economic conditions reflected less optimism in February.

For this month’s Texas Business Outlook Surveys, respondents were asked special questions on employment expectations and the labor market this month.

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Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6703
E-mail: jennifer.chamberlain@dal.frb.org