The Texas services sector slipped back into contraction in February 2026, as the Texas Services Sector Outlook indicator fell to -3.2 from 2.7 in January 2026. The latest reading, updated on 24 February 2026, signals a weakening in activity after the brief expansion seen at the start of the year.
January’s positive 2.7 reading had suggested modest growth in the state’s service industries, but the move into negative territory in February points to declining conditions. While the extent and drivers of the downturn are not detailed in the available data, the shift from expansion to contraction may raise concerns about the momentum of Texas’s broader service-driven economy.
Investors, businesses, and policymakers will be watching subsequent releases closely to gauge whether February’s decline marks the beginning of a more persistent soft patch or a temporary setback following January’s improvement.
