Economy Watch: Service Industries Enjoy 3Q Revenue Gains

A number of service industries, including real estate, saw revenue increases during the third quarter, providing another indication of an improving economy.
Source: U.S. Census Bureau
Source: U.S. Census Bureau

A number of service industries, including some that tend to be commercial-space intensive, saw revenue increases during the third quarter, the Census Bureau recently reported, providing another indication that the economy is improving. All together, revenues were up 1.6 percent for the quarter for the industries that the bureau tracks, and 5.3 percent since last year.

Professional, scientific and technical services, as well as the finance and insurance sector, both experienced revenue gains in the third quarter. Their health affects office leasing in a number of markets (such as Boston, San Francisco and Seattle), though it isn’t a direct correlation. Professional, scientific and technical services saw a revenue increase of 1.2 percent for the quarter and 4.9 percent since third-quarter 2015. The finance and insurance industry enjoyed a revenue bump of 1.3 percent for the quarter and 6.1 percent for the year.

Despite headwinds caused by the strength of the dollar and its impact on exports, transportation and warehousing enjoyed a 2.2 percent increase in revenue for the quarter, but a 1.1 percent drop for the year. Health care suffered a decrease of 1.5 percent in revenue for the quarter, but an increase for the year of 5.4 percent.

The hospitality industry’s revenues were up 6.3 percent for the quarter and 7.7 percent for the year. Real estate industry revenue saw an increase of 3.6 percent for the quarter, representing a gain of 9.6 percent since the third quarter of 2015.