Even as retail slows, service sector grows
Texas managers have concerns about possible business regulations.
The state’s service sector expanded at a faster rate in May, but the slower growth of retail sales and concerns about state and federal policies clouded managers’ outlooks on business conditions, according to a report Wednesday from the Federal Reserve Bank of Dallas.
The state revenue index, a key measure of activity at private, service-providing firms in Texas, ticked up to a reading of 15.9 in May from 12.1 the prior month, according to the Texas Service Sector Outlook Survey.
The greater, positive figure indicated that the sector grew at a modestly faster pace than in April.
The private service sector in Texas has expanded every month since November 2009, according to Dallas Fed data, but retail sales have ebbed and flowed over that 90-month stretch. In May, retailers saw sales increase, albeit at a slower rate than the prior month.
The state sales index, which measures retail activity, dipped to 10.1 in May from to 13.7 in April, according to the Texas Retail Outlook Survey, a subsection of the broader sector report.
Despite the slower growth in May, retail sales remained ahead of last year’s pace, Dallas Fed economist Amy Jordan said in a release.
“Texas private service sector activity continued expanding with a pick-up in growth this month, although uncertainty remains a limiting factor,” Jordan said.
Retailers actually cut overall payrolls during the month, according to a gauge of employment levels. However, service-providing firms as a whole kept up their hiring spree, with sectorwide employment measures showing expansion for an 87th consecutive month.
Private service-providing companies account for about twothirds of the state’s non-farm jobs, according to the Texas Workforce Commission. The same companies account for about 60 percent of the state’s economic output,