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October 2019 Nonmanufacturing Business Outlook Survey

Responses to the October Nonmanufacturing Business Outlook Survey suggest continued expansion of nonmanufacturing activity in the region. Although the index for general activity at the firm level fell, the indexes for sales/revenues and new orders both rose. The index for full-time employment decreased. The firms continued to report overall increases in the prices of both their own goods and their inputs, but the price indexes moderated. The respondents continued to anticipate growth over the next six months.

Current and Future General Activity Indexes for Firms

Current Indicator Movements Were Mixed

The diffusion index for current general activity at the firm level fell 21 points to 8.7 in October, its lowest reading since January (see Chart 1). More than 33 percent of the firms reported increases in activity (down from 41 percent last month), and 25 percent reported decreases (up from 12 percent last month). The new orders index rose 17 points to 26.9 in October after two months of low readings. The share of firms reporting increases in new orders (41 percent) was higher than the share reporting decreases (14 percent). The sales/revenues index edged up 3 points to 25.5 in October. Nearly 41 percent of the responding firms reported increases in sales/revenues, while 15 percent reported decreases. The regional activity index edged up 3 points to 12.6.

Employment Indicators Moderate

The firms continued to report overall increases in full-time and part-time employment, but both indexes fell from their readings last month. The full-time employment index fell 6 points to 15.9. Nearly 69 percent of the firms reported steady full-time employment levels, while the share of firms reporting increases (23 percent) was higher than the share reporting decreases (7 percent). The part-time employment index decreased 13 points to 10.8, and the wages and benefits indicator rose 6 points to 41.9. The average workweek index edged down 2 points to 10.8.

Firms Continue to Report Overall Price Increases

Price indicator readings suggest overall increases in prices for inputs and for the firms’ own goods and services, but both indicators fell slightly. The prices paid index declined 6 points to 20.5 (see Chart 2). Although the majority of respondents (62 percent) reported stable input prices, 25 percent of the respondents reported increases, while only 5 percent reported decreases. Regarding prices for firms’ own goods and services, the prices received index ticked down 4 points from September to 8.0 in October. While 12 percent of the firms reported increases in prices received, only 4 percent reported decreases. More than 77 percent of the firms reported no change in prices for their own goods and services.


Prices Paid and Prices Received Indexes

Firms’ Optimism for Future Growth Improves

Both future activity indexes suggest that firms anticipate continued growth over the next six months. The diffusion index for future activity at the firm level moved up from a reading of 30.7 in September to 47.5 this month (see Chart 1). More than 55 percent of the firms expect an increase in activity at their firms over the next six months, compared with 8 percent that expect decreases and 35 percent that expect no change. The future regional activity index edged down 2 points to 15.5.

Summary

Responses to this month’s Nonmanufacturing Business Outlook Survey suggest that nonmanufacturing activity continued to grow in the region. The indicators for firm-level general activity and full-time employment both decreased, while the sales/revenues and new orders indexes both rose. Furthermore, optimism about firm-level growth over the next six months was more widespread this month.

Summary of Returns (October 2019)

Summary of Returns

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October 2019 PDF

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Questions?

Questions about the Nonmanufacturing Business Outlook Survey and its historical data can be addressed to Elif Sen. E-mail