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Note: Philadelphia Fed Researchers Revise Seasonal Adjustments

As of the April 2021 release, the Philadelphia Fed adjusted the seasonal factors used to calculate the survey’s diffusion indexes and revised the full set of historical data. The data on this page have not been updated. Please download the historical data file available here for the latest data.

January 2021 Nonmanufacturing Business Outlook Survey


Note: Survey responses were collected from January 11 to January 21.

Responses to the January Nonmanufacturing Business Outlook Survey suggest further weakening in nonmanufacturing activity in the region. The indexes for general activity at the firm level and sales/revenues both declined and posted negative readings. Although the indexes for new orders and full-time employment increased, readings for both remained low. The firms continued to report overall increases in the prices of both their own goods and their inputs. The respondents continued to anticipate growth over the next six months.

Firm-Level General Activity Index Turns Negative

The diffusion index for current general activity at the firm level fell 19 points, from a revised reading of 5.0 in December to -14.3 in January, its first negative reading since May (see Chart 1).* More than 37 percent of the firms reported decreases in activity (up from 28 percent last month), and 23 percent reported increases (down from 33 percent). The new orders index increased 10 points to 0.2 in January, as similar shares of firms reported increases and decreases (27 percent). The sales/revenues index decreased 4 points to -11.8 in January, its third consecutive negative reading. Nearly 25 percent of the responding firms reported increases in sales/revenues, while 37 percent reported decreases. The regional activity index rose 9 points to -17.5.

Current and Future General Activity Indexes for Firms

Full-Time Employment Rebounds into Positive Territory

The full-time employment index rose from a revised reading of -5.8 in December to 3.1 in January. Over 67 percent of the firms reported steady full-time employment levels, while the share of firms reporting increases (16 percent) was higher than the share reporting decreases (12 percent). The part-time employment index increased 8 points to -4.8, and the wages and benefits indicator increased 8 points to 16.4. The average workweek index edged up 2 points to 0.5.

Firms Continue to Report Overall Price Increases

The prices paid index rose 8 points to 23.3 (see Chart 2). Nearly 48 percent of the respondents reported stable input prices, while 27 percent of the respondents reported increases, and only 3 percent reported decreases. Regarding prices for firms’ own goods and services, the prices received index decreased from a revised reading of 9.5 in December to 1.2 in January. The share of firms reporting increases in prices received (8 percent) narrowly exceeded the share reporting decreases (7 percent). More than 65 percent of the firms reported no change in prices for their own goods and services.

Prices Paid and Prices Received Indexes

Firms Continue to Anticipate Growth

Both future activity indexes suggest that firms continue to anticipate growth over the next six months. The diffusion index for future activity at the firm level declined from a revised reading of 38.5 in December to 34.3 this month (see Chart 1). Over 58 percent of the firms expect an increase in activity at their firms over the next six months, compared with 24 percent that expect decreases and 17 percent that expect no change. The future regional activity index increased 8 points to 34.3.

Summary

Responses to this month’s Nonmanufacturing Business Outlook Survey suggest weakness in nonmanufacturing activity in the region. The indicators for firm-level general activity and sales/revenues both fell and posted negative readings this month. The indexes for new orders and full-time employment increased but remained low. Overall, the respondents continue to expect growth over the next six months in their own firms and in the region.

* The survey’s annual historical revisions, which incorporate new seasonal adjustment factors, were released on January 19, 2021. See the impact of revisions for 2020 or the full set of revised historical data on the Bank’s website.

Summary of Returns (January 2021)

Summary of Returns

Return to the main page for the Nonmanufacturing Business Outlook Survey.