Texas Service Sector Outlook Survey

Texas Service Sector Outlook Survey

Growth stalls in Texas service sector while price pressures continue easing

Growth in Texas service sector activity slowed 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, fell from 4.0 to 0.3, with the near-zero reading suggestive of flat output growth.

Labor market measures suggested a slight contraction in employment and work weeks in April. The employment index fell from -1.2 to -2.6. The part-time employment index held mostly steady at 0.1, while the hours worked index fell three points to -2.1.

Respondents in April continued to perceive worsening broader business conditions. The general business activity index remained negative and fell five points to -10.6. The company outlook index also fell, but slightly from -0.1 to -1.8. The outlook uncertainty index increased three points to 13.4.

Price and wage pressures eased this month. The selling price index fell four points to 3.9 while the input price index fell from 30.4 to 28.8. The wages and benefits index decreased five points to 14.2.

Respondents' expectations regarding future business activity were mixed in April. The future general business activity index fell seven points to -1.9, the first time the index dipped into negative territory since November. The future revenue index stayed positive but fell six points to 33.3. Other future service-sector activity indexes such as employment and capital expenditures remained in positive territory, reflecting expectations for continued growth in the next six months.

Texas Retail Outlook Survey

Texas retail sales continue falling

Retail sales activity declined in April, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell from -3.4 to -10.4, indicating retail sales fell at a faster rate than the previous month. Retailers' inventories contracted over the month, with the April index at -3.0.

Retail labor market indicators suggested no growth in employment and shorter workweeks in April. The employment index increased from -5.0 to -0.5, with the near-zero reading suggesting flat employment in April. The part-time employment index was largely unchanged at 2.6. The hours worked index fell from -6.3 to -12.8.

Retailers continued to perceive a worsening of broader business conditions in April. The general business activity index remained in negative territory and fell two points to -18.0, while the company outlook index also fell two points to -6.4. The outlook uncertainty index held steady at 15.8.

Input price and wage pressures eased while selling price index turned negative in April for the first time since May 2020. The input price index fell 14 points to 12.7 while the selling price index moved down from 4.4 to -8.8. The wages and benefits index fell 11 points to 11.0.

Expectations for future retail sales improved in April. The future general business activity index increased from 8.2 to 11.1. The future sales index fell two points but remained in firmly positive territory at 31.4. Other indexes of future retail activity such as employment and capital expenditures showed mixed movements but remained positive, reflecting expectations for continued retail sales growth in the next six months.

Next release: May 29, 2024