Texas service activity grows in February, but retail sales decline slightly
By SHERYL JEAN
Texas’ service sector activity expanded in February, according to data released Tuesday by the Federal Reserve Bank of Dallas.
The Texas Service Sector Outlook Survey’s revenue index, a key measure of service conditions, rose from 8.4 to 14.2. Thirty-four percent of respondents noted revenue increases from January.
Labor market indicators reflected more hiring and longer workweeks. The employment index rose 7 points to its highest level in 12 months, and the hours worked index rose to 3.4 from -0.2 in January.
Still, some businesses remain concerned about rising fuel prices, the potential impact of federal spending cuts, higher health care costs and less consumer spending.
“Sales have gotten even softer than they were in January,” said a restaurant-bar operator in the survey. “The payroll tax increase and rising gasoline prices seem to be the most likely causes of the downturn. We are probably going to have more part-time hourly employees over the six-month horizon as we try to manage labor even tighter than we have in the past to control ever-rising costs.”
Company outlooks and perceptions of general business activity were relatively flat.
Retail grew at a slower pace in February, according to the retail portion of the Dallas Fed’s survey. The Texas Retail Outlook Survey’s sales index edged down from 14.8 to 12.4. Inventories were up.
Company outlooks and perceptions of general business activity by retailers and wholesalers were strong.
Services represent 60 percent of the Texas economy and employ nearly 7.3 million workers.
Follow Sheryl Jean on Twitter at @SherylJeanDMN.