Texas Service Sector Outlook Survey

Texas Service Sector Outlook Survey

Texas service sector activity growth picks up slightly; outlook uncertainty falls

Texas service sector activity expanded at a slightly faster pace in November than the prior month, according to business executives responding to the Texas Service Sector Outlook Survey. The revenue index, a key measure of state service sector conditions, increased to 10.9.

Labor market measures suggested a resumption of employment growth and an improvement in workweeks in November. The employment index jumped to 5.1 from -0.2, while the part-time employment index rose five points to 2.5. The hours worked index increased to 4.8.

Perceptions of broader business conditions improved significantly in November. The general business activity index increased eight points to 9.8, its highest reading since early 2022. The company outlook index increased six points to 10.1, also its highest level in more than two years. Finally, the outlook uncertainty index fell 16 points to 1.8, the lowest level since mid-2021.

Input price pressures eased, while selling price and wage pressures held steady in November. The input price index fell seven points to 19.0 and the selling price index was little changed at 2.8. The wages and benefits index was unchanged at 16.4.

Respondents' expectations regarding future business activity reflected improved optimism in November. The future general business activity index moved up five points to 29.8, while the future revenue index increased four points to 44.0. Other future service sector activity indexes such as employment and capital expenditures remained in positive territory and increased, reflecting expectations for sustained growth in the next six months.

Texas Retail Outlook Survey

Texas retail sales growth resumes

Retail sales activity rebounded in November, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, increased 16 points to 4.6, its highest level in more than two years. Retailers' inventories grew over the month, with the November index increasing to 16.6.

Retail labor market indicators suggested growth in employment and workweeks this month. The employment index climbed 10 points to 5.7, while the part-time employment index edged up to 1.0. The hours worked index jumped nine points to 9.9.

Perceptions of broader business conditions improved notably in November. The general business activity index rebounded to 8.2 from -19.8. The company outlook index increased 23 points to 11.9. Uncertainty in outlooks fell.

Selling price pressures held steady and input price growth slowed; however, wage growth resumed in November. The selling price index was little changed at 0.1. The input price index fell 10 points to 9.0. The wages and benefits index jumped to 18.0.

Expectations for future business conditions improved slightly in November. The future general business activity index increased three points to 28.7, and the future sales index was little changed at 25.3. Both the future employment index and the future capital expenditures index remained in positive territory and increased, suggesting further improvement in retail activity in the next six months.

Next release: December 31, 2024