DALLAS—Retail sales improved notably again in September, according to business executives responding to the Texas retail outlook survey by the Dallas Federal Reserve. The sales index surged 16 points to 32.8 in September, its highest reading in three years, GlobeSt.com learns. Inventories increased at a slower pace last month.

Labor market measures indicated slight employment gains and longer workweeks. The employment index edged up to 0.9. The hours worked index fell from 11.3 to 5.1.

Retailers' perceptions of broader economic conditions reflected more optimism in September. The general business activity index jumped from 9.7 to 19.3. The company outlook index surged 14 points to 22.8, with 31% of respondents reporting that their outlooks improved last month and 8% noting that outlooks had worsened.

Retail price pressures were unchanged while wage pressures increased last month. The selling prices index was similar to last month at 18.6. The wages and benefits index moved up six points to 20, although the majority of firms continued to note no change in compensation.

Retailers' perceptions of future broader economic conditions reflected more optimism in September. The index of future general business activity rose sharply from 11.6 to 31.2. The index of future company outlook advanced 13 points to 31.1, its highest reading this year. Indexes of future retail sector activity continued to reflect optimism.

This growth goes hand in hand with Dallas/Fort Worth's tightening retail market, strong net absorption and deliveries pushing occupancy rates to new highs. Occupancy remains steadfast at all-time highs, reaching 94.6% in third quarter, according to CBRE. Looking ahead to the holiday season, filled centers have the potential to provide the strongest consumer spending in years.

With a large number of major developments coming on line this quarter, North Texas' construction pipeline remains relatively robust, but with little backfill. Rising construction costs and rebuilding due to Hurricane Harvey are expected to contribute to a minor slowdown in the short term.

As the market stabilizes, the pace of absorption of big-box space throughout 2017 is slower than in years past, even within class-A inventory. This is due to a smaller pool of tenants chasing an increased supply of opportunities both in DFW and around the country, says CBRE.

Texas service sector growth picked up slightly in September, according to business executives responding to the Texas service sector outlook survey by the Fed. The revenue index, a key measure of state service sector conditions, edged up from 14.2 in August to 15.9 in September.

Labor market indicators reflected slower employment growth and slightly longer workweeks last month. The employment index moved down a point to 3.5. The hours worked index fell from 8.3 to 2.7.

Perceptions of broader economic conditions reflected less optimism in September, GlobeSt.com learns. The general business activity index dipped three points to 12.4. The company outlook index dropped eight points to 7.7, with 21% of respondents reporting that their outlooks improved from the previous month and 14% noting outlooks worsened.

Price and wage pressures were mostly unchanged last month. The selling prices index held steady at 4.7. The wages and benefits index inched up a point to 15.6, although the majority of firms continued to note no change in compensation.

Respondents' expectations regarding future business conditions reflected more optimism in September. The index of future general business activity rose from 21.3 to 28. The index of future company outlook moved up three points to 29.4. Indexes of future service sector activity, such as future revenue and employment, continued to reflect optimism last month.

Labor market measures indicated slight employment gains and longer workweeks. The employment index edged up to 0.9. The hours worked index fell from 11.3 to 5.1.

Labor market indicators reflected slower employment growth and slightly longer workweeks last month. The employment index moved down a point to 3.5. The hours worked index fell from 8.3 to 2.7.

Instant Insights /

Retail Sales Growth Improves

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