Activity in the Texas service sector was roughly flat in January, 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 5.5 in December to 0.8 in January, indicating a flattening out of activity.
Labor market indicators suggest slower employment growth and little change in the hours worked in January. The employment index declined over four points to 1.6, while the part-time employment index was mostly unchanged at 0.6. The hours worked index was similarly flat at 1.6.
Perceptions of broader business conditions held steady compared with December. The general business activity index was roughly unchanged at -1.2, while the company outlook index dipped slightly from 2.3 to 1.0. The outlook uncertainty index rose slightly to 6.4.
Price pressures remained steady in January, while wage pressures increased. The selling prices index and input prices index were stable from December at 6.2 and 22.1, respectively. The wages and benefits index rose three points to 11.9, its highest value in nearly a year.
Respondents’ expectations regarding future business activity were slightly less optimistic compared with December. The future general business activity index fell two points to 23.2, while the future revenue index slipped nearly four points to 38.2, though still well above its 2020 average. Other indexes of future service sector activity such as employment declined but remained firmly positive, suggesting expectations of stronger activity in the first half of the year.