TEXAS SERVICE SECTOR AND RETAIL EXECUTIVES POSTED RECORD LEVELS OF CONFIDENCE IN THEIR COMPANIES’ OUTLOOK, CITING THE END OF THE U.S. PRESIDENTIAL ELECTION AND THE STATE’S IMPROVING OIL AND GAS SECTOR.
The Federal Reserve Bank of Dallas’ future general business activity index for the state’s service sector hit an all-time high of 39.8, indicating optimism that business will improve in the next six months, according to results from the Dallas Fed’s service sector outlook survey released Wednesday.
The Dallas Fed’s future company outlook index jumped from 32.6 in November to 39 in December. More than 46 percent of executives surveyed said they expect company conditions to look up by summer
Texas retailers were even more optimistic. The future general business activity index for retailers rocketed from 19.9 last month to 41.9 in December, according to the Dallas Fed’s retail outlook survey results. More than 48 percent of surveyed executives said they expect retail activity to pick up by June.
That hope carried over to retailers’ own companies. The future company outlook index for retailers jumped more than 16 points to 44.9 in December, up from 28.6 in November.
Business leaders have long complained that regulations enacted by President Barack Obama — including the Affordable Care Act and changes to the Fair Labor Standards Act that allow overtime pay for some salaried workers — have driven up costs.
The state’s service sector — which covers intangible goods such as health care, entertainment and legal and professional services and makes up roughly 70 percent of the Texas economy — saw revenue grow at a quicker pace in December. The Dallas Fed’s service sector revenue index jumped from 13.7 in November to 20.6 this month.
“Part of that uptick is the result of what appears to be more a lucrative holiday shopping season”, said George Kelemen, CEO and President of the Texas Retailers Association.
“We think that’s a good forebear for going into the new year,” Kelemen said.
Online vendors raked in $79.2 billion from Nov. 1 to Dec. 20, according to the latest figures from Adobe Insights. The National Retail Federation predicted total holiday retail sales could jump 3.6 percent to $655.8 billion from last year’s $632.8 billion. Total holiday sales could climb past $1 trillion this year, according to a separate study conducted by Deloitte University.
Sales are also recovering in areas of the state hit hard by the oil and gas downturn, Jordan said. But businesses in border towns took a hit as shoppers from Mexico spent less because of the weakening peso, she said.
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