Dallas Fed: Growth resumes in Texas service sector activity, company outlook improves

DALLAS—Texas service sector activity expanded in February after contracting in January, according to business executives responding to the Federal Reserve Bank of Dallas’ Texas Service Sector Outlook Survey.

“Labor market measures suggest continued service sector employment growth,” said Jesus Cañas, Dallas Fed senior business economist. “Input and selling price pressure remained largely unchanged and wage growth eased slightly. While input price growth continues above average, selling price growth is now at its historical average. Respondents in February continued to perceive worsening broader business conditions, but their company outlook improved.”

Key takeaways from the service sector survey: 

• The revenue index increased nine points to 5.2.
• The employment index held steady at 3.8.
• Both the input prices and selling prices indexes were mostly unchanged at 34.3 and 7.7, respectively.
• The wages and benefits index fell two points to 15.4. 
• The general business activity index remained negative but rose five points to -3.9. The company outlook index moved up to positive territory from -4.9 to 3.8.

 

Texas retail sales pull back   

“Retail sales activity declined in February, but at a considerably slower pace than last month while labor market indicators reflected employment growth in February,” Cañas said.

Key takeaways from the retail survey: 

• The sales index jumped from -28.6 to -5.3.
• The employment index increased from -8.4 to 2.4.
• The general business activity index remained in negative territory but increased from -25.4 to -18.0. 

  Data were collected Feb. 13–21, and 273 Texas service sector business executives responded to the survey. \For this month’s survey, Texas business executives were asked supplemental questions on demand expectations and the workforce. 

The Dallas Fed conducts the survey monthly to obtain a timely assessment of activity in the state’s service sector, which represents almost 70 percent of the state’s economy and employs about 9.5 million workers.         

For more information, visit DallasFed.org.    

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Media contact:
James Hoard
Federal Reserve Bank of Dallas
Phone: 214-922-5307
Email: james.hoard@dal.frb.org