December 2025 Nonmanufacturing Business Outlook Survey

Note: Survey responses were collected from December 8 to December 18.

Nonmanufacturing activity in the region softened overall, according to the firms responding to the December Nonmanufacturing Business Outlook Survey. The indexes for general activity at the firm level, new orders, and sales/revenues all moved down but remained positive. The firms reported an overall increase in full- and part-time employment. Both price indexes remained elevated, and the prices paid index increased further. The respondents’ expectations for growth at their own firms over the next six months were more widespread this month.

Most Current Indicators Soften

The diffusion index for current general activity at the firm level fell 16 points to 4.3 in December, mostly undoing its increase from last month (see Chart 1). More than 36 percent of the firms reported increases in activity (down from 44 percent last month), 32 percent reported decreases (up from 24 percent), and 24 percent reported no change (down from 28 percent). The new orders index declined 3 points to 3.2. Almost 28 percent of the firms reported increases, 25 percent reported decreases, and 21 percent reported no change. The sales/revenues index edged down 2 points to 15.3, slightly below its long-run average. The current regional activity index remained largely unchanged at -16.8.

Firms Report Overall Increases in Employment

The full-time employment index rose 7 points to 9.6, its highest reading since May. More than 23 percent of the firms reported increases, while 14 percent reported decreases; 60 percent of the firms reported no change. The part-time employment index jumped from -0.6 to 17.5, its highest reading since March 2022. The average workweek index fell 3 points to 10.5.

Firms Continue to Report Overall Price Increases

Price indicators suggest continued increases in prices for inputs and firms’ own goods and services. The prices paid index rose 6 points to 40.3, its highest reading since August (see Chart 2). More than 45 percent of the firms reported increases in input prices, while 5 percent reported decreases; 35 percent reported steady prices. Regarding prices for the firms’ own goods and services, the prices received index moved down 3 points to 19.0. Most of the firms (58 percent) reported no change in prices received, while the share reporting increases (29 percent) exceeded the share reporting decreases (9 percent).

Firms Report Higher Sales/Revenues on Balance

In this month’s special questions, the firms were asked to estimate their total sales/revenues growth for the fourth quarter ending this month compared with the third quarter of 2025; they were also asked about factors constraining business operations and capital expenditure plans. Just over 56 percent of the firms expected increases in fourth-quarter sales, while more than 29 percent expected decreases.

In the current quarter, nearly 89 percent of the firms reported uncertainty as at least a slight constraint on business operations, with 30 percent of the firms reporting it as a significant constraint. Labor supply was cited by more than 63 percent of the firms as at least a slight constraint. Looking ahead over the next three months, most of the firms expect labor supply and supply chain impacts to stay the same. However, 45 percent of the firms expect the impact of uncertainty to worsen, and 34 percent expect the impact of energy markets to improve.

Expectations Are Mixed

Future activity indicators for growth over the next six months were positive at the firm level but remained negative for the region. The diffusion index for future activity at the firm level rose 10 points to 11.4, nearly undoing its decrease over the last two months (see Chart 1). More than 42 percent of the firms expect increases, 31 percent expect decreases, and 23 percent expect no change. The future regional activity index, which has been negative for 10 of the last 11 months, remained largely unchanged at -13.8.

Summary

Responses to this month’s Nonmanufacturing Business Outlook Survey suggest nonmanufacturing activity softened but remained positive overall. The indicators for firm-level general activity, new orders, and sales/revenues all declined but remained positive. The firms reported overall increases in full- and part-time employment and continued increases in prices. On balance, the firms expect growth at their own firms over the next six months.

Summary of Returns (December 2025)

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