Texas saw its service sector activity expand again in November and at a faster pace than a month earlier, according to a report Tuesday from the Federal Reserve Bank of Dallas.
The Texas Service Sector Outlook Survey’s revenue index — a key measure of the state’s service sector conditions — rose from a reading of 9.9 in October to 13.7 in November. Positive readings in the survey generally indicate expansion of service sector activity, while readings below zero generally indicate contraction, the Dallas Fed says.
The Texas service sector represents about 70 percent of the state’s economy and employs about 8.2 million workers, according to the Dallas Fed.
Several respondents in the survey pointed to the presidential election results as hope for new stabilization, as they noted the level of business activity might have slowed as a result of the uncertainty ahead of the vote.
The survey found that overall perceptions of broad economic conditions reflected more optimism this month as the general business activity index rose from a reading of 3.0 in October to 12.6 this month. The company outlook index rose from near zero to 15.6.
Survey respondents’ future outlook, looking six months ahead, also reflected more optimism, the survey found.
The report’s index of future general business activity rose from 20 to 29.1, while the index of future company outlook rose from 12.2 to 32.6.
“Indexes of future service sector activity, such as future revenue and employment, continued to reflect optimism this month,” the Dallas Fed said.
However, some survey respondents said they were unsure what the long-term impact of the presidential election could be.
“I think many Americans and Texans are feeling uneasy about the surprising results of the election and as a result are feeling skittish about spending as they fear jobs cuts are coming,” the respondent told the Dallas Fed. “It is hard to predict how the new administration will positively or negatively impact job growth.”
In addition to the positive signs from the November report, the survey’s labor market indicators reflected faster employment growth while showing relatively stable workweeks this month, the Dallas Fed survey said.
The survey’s employment index rose from a reading of 2.7 in October to 9.2 in November.
Meanwhile, the hours worked index increased from a reading of -1.4 last month to a reading near zero.
The Texas Retail Outlook Survey, which compiles responses from the retail and wholesale sectors, also found that retail sales grew in November. The sales index rose from -6.6 last month to 13.2 this month.
“Retailers’ perceptions of broader economic conditions improved markedly in November,” the report said.
Retailers’ perceptions of broader economic conditions also improved in November, as the general business activity index rose from -5.1 in October to 10.1 this month, the Dallas Fed said. Meanwhile, the company outlook index rose 19 points to 13.5.