March 1, 2022
Texas service sector sees significant acceleration in February
What’s new this month
For this month’s survey, Texas business leaders answered additional questions about supply chain disruptions. The results of these questions from the Texas Manufacturing Outlook Survey, the Texas Service Sector Outlook Survey and the Texas Retail Outlook Survey have been published together. Read the results of the special questions.
Activity in the Texas service sector rebounded strongly in February, according to business executives responding to the Texas Service Sector Outlook Survey. The earnings index, a key measure of conditions in the utilities sector, rose from 2.8 in January to 21.9 in February.
Labor market indicators point to an acceleration in the pace of growth in hiring and hours worked. The employment index rose from 9.2 to 14.6, while the part-time employment index added three points to reach 6.5. The hours worked index fell from 7.4 in January to 10.4 in February.
Perceptions of general business conditions rebounded in February. The general business activity index jumped 16 points to 16.6, while the business outlook index rose from -0.4 to 14.2. The increase in uncertainty moderated, with the outlook uncertainty index falling from 19.7 to 7.6.
Wage and price pressures remained extremely high in February, with indices holding up at historic highs. The pay and benefits index rose from a record high of 37.4 to 34.7, with more than a third of respondents noting monthly wage increases. The Selling Price Index was unchanged at 29.9, while the Input Price Index remained roughly flat at 51.2, with the majority of contacts reporting monthly increases in input prices for the fifth consecutive month.
Respondents’ expectations regarding future business activity reflect strong optimism. The future general business activity index rose from 16.7 to 21.2, while the future earnings index fell slightly but remained well above its long-term average at 51.6 . Other future indices of service sector activity, such as employment and capital spending, rose slightly and remained firmly positive.
March 1, 2022
Retail sales rebound in Texas in February
February Retail sales activity has moved back into positive territory after a decline in January, according to business executives responding to the Texas Retail Outlook survey. The sales index, a key measure of state retail activity, jumped 18 points to 10.2 in February, above its 12-month average. Businesses noted a continued decline in inventories, albeit at a slower pace, as the inventory index fell from -10.0 to -2.1.
Retail labor market indicators were strongly positive in February, with a faster pace of hiring and longer weekly hours. The employment index added five points to 11.0 – its best reading since 2018 – while the part-time employment index rose from 1.6 to 8.4. The hours worked index rebounded from negative territory to 10.6, its highest level since before the pandemic.
Retailers’ perceptions of general business conditions were generally optimistic in February. The general activity index rose from -7.2 to 2.7, while the business outlook index jumped 18 points to 7.8. The rise in uncertainty about the outlook has eased after a sharp rise in January, with the corresponding index dipping from 24.0 to 2.2.
Retail price pressures increased further in February, while wage pressures eased somewhat. The selling price index rose six points to 49.9, with almost 60% of contacts noting an increase in their prices compared to January, while the input price index rose nine points to 54. ,3. The wages and benefits index slipped from 37.1 to 34.9, although it remains well above its long-term average.
Expectations for future retail activity reflect strong optimism. The future general business activity index recovered from 4.2 to 10.1, while the future sales index slipped from 44.5 to 39.1. Other indices of future retail activity rose, suggesting further strength in retail activity over the next six months.
The Texas Retail Outlook Survey is a component of the Texas Services Sector Outlook Survey that uses information only from respondents in the retail and wholesale industries.
Next release: March 29, 2022
The data was collected from Feb. 15-23, and 276 Texas service-industry business executives, 45 of whom were retailers, completed the survey. The Dallas Fed conducts a monthly Texas Service Sector Outlook Survey to get a timely assessment of service sector activity in the state. Businesses are asked whether revenue, employment, prices, general business activity and other indicators rose, fell or were unchanged from the previous month.
The survey responses are used to calculate an index for each indicator. Each index is calculated by subtracting the percentage of respondents reporting a decrease from the percentage reporting an increase. When the share of companies reporting an increase exceeds the share reporting a decrease, the index will be above zero, suggesting that the indicator has increased compared to the previous month. If the share of companies reporting a decline exceeds the share reporting an increase, the index will be below zero, suggesting that the indicator has fallen from the previous month. An index will equal zero when the number of companies reporting an increase is equal to the number of companies reporting a decrease. Data have been seasonally adjusted where necessary.