Texas service sector activity expanded in December, according to business executives responding to the Texas Service Sector Outlook Survey.

The revenue index, a key measure of state service sector conditions, rose from 11.1 to 14, with 36% of respondents noting revenues increased from November.

Labor market indicators reflected slightly stronger labor demand growth, including longer workweeks. The employment index edged up from 8.2 to 10.1. The hours worked index increased from 0.7 to 5.3.

Perceptions of broader economic conditions improved in December. The general business activity index advanced from 7.1 to 11.6, its highest reading since April. The company outlook index rose from 5.8 to 8.7, with 21% of respondents reporting that their outlook improved from last month and 12% noting they worsened.

Selling prices and wages rose faster in December. The selling prices index edged up from 6 to 7.4. The wages and benefits index moved up from 10.1 to 15.8.

Respondents were markedly more optimistic about expectations regarding future business conditions than last month. The index of future general business activity advanced 5 points to 11.7, and the index of future company outlook rose sharply from 1.4 to 16.8, its highest reading in three months. Indexes of future service sector activity, such as future revenue and employment, rose in December and remained in solid positive territory.

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