Texas Service Sector Outlook Survey

Texas Service Sector Outlook Survey

Texas service sector activity growth continues, outlook improves

Texas service sector activity expanded at about the same pace in October as 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, was little changed at 9.2.

Labor market measures suggested no growth in employment in October but slight improvement in hours worked. The employment index came in at -0.2, with the near-zero reading signaling flat employment in October. The part-time employment index fell to -2.0. The hours-worked index increased to 2.5.

Perceptions of broader business conditions improved in October. The general business activity index increased five points to 2.0, its first positive reading in more than two years. The company outlook index increased three points to 3.8. Nevertheless, the outlook uncertainty index increased nine points to 17.9.

Wage and input price pressures increased, while selling price pressures held steady in October. The input price index increased three points to 26.1 and the selling price index was little changed at 4.0. The wages and benefits index increased four points to 16.3.

Respondents' expectations regarding future business activity reflected improved optimism in October. The future general business activity index jumped nine points to 25.3, while the future revenue index increased five points to 40.1. Other future service-sector activity indexes such as employment and capital expenditures remained in positive territory and increased, reflecting expectations for continued growth in the next six months.

Texas Retail Outlook Survey

Texas retail sales fall again

Retail sales activity declined in October, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell three points to -11.4. Retailers' inventories grew over the month, with the October index increasing to 7.6.

Retail labor market indicators suggested contraction in employment and flat workweeks this month. The employment index remained in negative territory but increased four points to -3.8, while the part-time employment index increased to -2.7. The hours-worked index came in at 1.0, with the near-zero reading signaling little change in work hours from October.

Retailers continued to perceive a worsening of broader business conditions in October. The general business activity index fell five points to -19.8. The company outlook index remained in negative territory but increased to -11.1. Uncertainty in outlooks rose.

Selling prices stabilized in October, while input price growth increased slightly, and wage pressures held steady from the prior month. The selling price index fell four points to -1.0, with the near-zero reading signaling no change in prices from October. The input price index increased two points to 18.7. The wages and benefits index was essentially unchanged at 3.8.

Expectations for future business conditions improved in October. The future general business activity index jumped to 25.7, and the future sales index increased nine points to 24.8. Both the future employment index and the future capital expenditures index turned positive this month, reflecting expectations for growth in the next six months.

Next release: November 26, 2024