DALLAS — In a sign of a weakening Texas economy, sales tax revenue grew at its slowest pace in more than two years, according to a report from Comptroller Glenn Hegar.
The $2.12 billion collected in February and tabulated in March represents a 1.5% increase over the same month in 2014. The latest report marked the 60th consecutive month of increases.
The March report typically represents the lowest total collections each year, and the latest report was the lowest in dollar terms since the same month in 2014.
Hegar will send cities, counties, transit systems and special purpose taxing districts their April local sales tax allocations totaling $576.6 million, up 4% compared to April 2014.
Unlike previous reports over the past five years, the latest showed numerous decreases in sales tax collections, particularly in oil production areas of the state.
"State sales tax collections have now grown for 60 consecutive months despite weakening in the energy sector," Hegar said. "This moderated growth was expected and is currently in line with estimates presented in January."
Hegar's report came on the heels of a retail outlook survey from the Dallas Federal Reserve that fell in March to negative 6.4, its worst reading since July 2012 and the first negative reading in two years. The barometer was a positive 6.8 in February.
The new-orders index, already negative, fell to negative 16.1 from negative 12.2 in February. In fact, 12 out of 15 manufacturing indicators got worse, and only finished-goods inventories and wages and benefits improved.
For the third month in a row, manufacturers were pessimistic about broader business conditions, according to the survey. Nearly a third reported a decrease in new orders and 14% said they had shed workers in the past month. The prices for finished goods have also fallen, pushing the index to its lowest point in five years.
"Customers seem to be very hesitant on releasing capital equipment orders," one executive said in the survey, which keeps respondents' names anonymous to foster candid responses. "We have had multiple projects canceled because of the slowdown. The drop in oil prices has definitely played a part in this downturn."
Another executive whose business is largely oil related said the company has shifted its focus outside of the oil field to maintain sales.
Conditions seemed least favorable for manufacturers who make fabricated metal and machinery parts, particularly those that primarily sell to the oil industry.
Despite that, Hegar said that receipts in construction, services and restaurant sectors remained relatively strong.
"We will continue to monitor the state's economic activity and its impact on key revenue sources," he said.
