ENSERVICE BUSINESSES, COSTS & WORKING CAPITAL · OCTOBER 28, 2026
Texas Service Activity Returns to Growth as Cost Pressure Persists
The Dallas Fed's October survey showed Texas service revenue and outlook measures improving, while input, selling-price, and wage indexes remained well above long-run averages.
What the Dallas Fed reported on October 27
Source publication date: October 27, 2026. The Federal Reserve Bank of Dallas reported that its Texas service-sector revenue index increased five points to 4.4 in October, consistent with a modest pickup in activity. Employment was 2.8, part-time employment 2.6, and hours worked 2.2. The survey reflects responding Texas firms and diffusion indexes, not percentage growth rates or a forecast for a specific company.
- 01Revenue returned to growth
- 02Wage and input indexes stayed elevated
- 03Future revenue expectations strengthened
Outlook improved, but uncertainty remained elevated
The general business activity index increased to 4.0 from -1.8, and the company outlook index rose to 3.0 from -3.2. The uncertainty index was 16.3. Forward-looking measures were stronger: the future revenue index rose to 43.6, and the future general business activity index was 19.6. Expectations show the direction and breadth of respondent sentiment; they do not guarantee realized sales, margins, or hiring.
Cost and pricing measures stayed above historical norms
The input-price index was 41.7 compared with a series average of 28.0, while the selling-price index was 18.2 compared with an average of 7.5. The wages-and-benefits index reached 20.5, its highest reading since January 2023. A positive selling-price index does not by itself show that service firms fully recovered higher labor, occupancy, insurance, technology, energy, or supplier costs.
Practical borrower takeaway
Build the forecast from customer count or billable volume, utilization, price, churn, staffing, wage and benefit cost, major inputs, receivable timing, and committed contracts. Show which price increases are implemented versus planned, reconcile revenue growth to gross margin and cash collections, and test slower demand with continued cost pressure. Size working capital to a documented timing gap and explain the actions management would take if margin or collections weaken.
Service-business borrowers should separate revenue volume from price increases, quantify wage and input pressure, and show lenders how margins and liquidity hold up if costs outpace customer pass-through.
Discuss a financing need →This independent summary is based on the cited source and is provided for general educational purposes only. Terms and program requirements may change.