Activity declined slightly in the region’s service sector, according to firms responding to the Federal Reserve Bank of New York’s August 2022 Business Leaders Survey. The survey’s headline business activity index climbed six points but remained negative at -4.4. The business climate index was little changed at -29.5, indicating that firms generally viewed the business climate as worse than normal for this time of year. Employment growth remained modest, and wage increases remained widespread. The prices paid and prices received indexes continued to be elevated. Looking ahead, firms were not very optimistic that activity would increase over the next six months.
Conditions Remain Weak
Business activity in the region’s service sector declined slightly, according to the August survey. The headline business activity index rose six points to -4.4. Twenty-eight percent of respondents reported that conditions improved over the month and 32 percent said that conditions worsened. The business climate index moved up five points, but at -29.5, indicated that on net, firms continued to view the business climate as worse than normal.
Employment Growth Again Modest
The employment index edged up to 9.9, pointing to a modest increase in employment levels. The wages index was little changed at 51.6, signaling another month of strong wage growth. The prices paid index held steady at 82.4, suggesting ongoing significant input price increases, and the prices received index rose four points to 39.6. The capital spending index held steady at 8.3.
Firms Not Particularly Optimistic
Conditions are not expected to improve much in the months ahead. The index for future business activity came in at 12.6, and the index for the future business climate remained negative at -10.4. Employment is expected to grow in the months ahead, and wage and price increases are expected to remain widespread.