A bustling oil and gas industry puts smiles on a lot of faces, and a new report by the Federal Reserve Bank of Dallas shows the Texas service and retail sectors soaring in May, News Radio 1200 WOAI reports.
"The revenue index, which is a key measure of state service sector conditions, increased from 14.7 in April to 22.8 in May," the Dallas Fed said in its monthly report.
Retail sales reached their highest level since 2014 in May."Retailers perceptions of broader economic conditions improved significantly in May," the report said. "The general business activity index rebounded, and the company outlook index rose sharply."
But all is not well for retailers. The Dallas Fed says Texas retailers are being squeezed between higher costs for inventory and employees, but due to pressure from on line sellers, the retailers find their ability to raise prices limited.
Texas retailers predict that the strength of the retail sector will continue into the key back-to-school season in August, and the holiday season later this year.
In every sector retailers report conditions improving, and in many cases improving sharply, except for inventories, which are being crimped by higher prices. Fully 20% of retailers report smaller inventories in May as customers snap up their existing items, and replacing them costs more money.
Economists say the overall strong Texas economy is largely responsible for the stronger retail and service sector economy, but the surging oil and gas industry gets much of the credit.