Texas service sector activity accelerates slightly, retail sales rebound in April, says Dallas Fed survey
For Immediate Release: April 30, 2019
DALLAS—Texas service sector activity growth accelerated slightly in April, according to business executives responding to the Texas Service Sector Outlook Survey.
The revenue index, a key measure of state service sector conditions, increased from 12.3 in March to 13.9 in April. Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction.
Key takeaways from the report include:
Perceptions of broader business conditions improved, although measures of uncertainty remained elevated. The general business activity index surged over 10 points to 5.7 in April, and the company outlook index rebounded into positive territory, rising six points to 5.5. The outlook uncertainty index ticked up from 11.6 to 12.8.
“Texas service sector activity accelerated in April, as revenues grew at a faster pace,” said Christopher Slijk, Dallas Fed assistant economist. “Employment growth held steady, and price and wage pressures eased slightly. Overall, perceptions of current business conditions rebounded to positive territory, although retailers continued to note pessimism in their outlooks.”
Respondents were more optimistic about future business conditions. The future general business activity index rose eight points to 12.3, while the future company outlook index picked up to 19.4 in April—a six-month high.
For this month’s surveys, executives in both manufacturing and the service sector responded to supplemental questions on revenue, income taxes and drivers of uncertainty.
The survey also includes a component called the Texas Retail Outlook Survey (TROS), which uses information from respondents in the retail and wholesale sectors only.
Key takeaways from that report include:
Retail sales accelerated strongly. The sales index surged from -2.7 in March to 13.2 in April, its highest value since last October.
Perceptions of broader business conditions continued to worsen. The general business activity index increased eight points but remained negative at -10.7. Similarly, the company outlook index rose from -10.4 in March to -5.2 in April, the fifth consecutive month of net weakening in firms’ outlooks.
Retail labor market indicators were mixed. The employment index rose nine points to 8.5, while the hours worked index moved up slightly but remained negative at -2.2.
Price pressures were also mixed, while wage pressures eased. The selling prices index increased from 7.2 to 10.9, while the input prices index fell over eight points to 10.9. The wages and benefits index softened from 21.6 in March to 18.3 in April, though this is still elevated compared with historical norms.
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 8.6 million workers.
-30-
Media contact:
Jennifer Chamberlain
Federal Reserve Bank of Dallas
Phone: (214) 922-6748
Email: jennifer.chamberlain@dal.frb.org