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The Federal Reserve Bank of New York’s April 2014 Business Leaders Survey indicates that activity in the region’s service sector grew moderately. The survey’s headline business activity index climbed for a second consecutive month, rising fifteen points to 12.7, its highest reading since November. The business climate index also rose fifteen points, but remained negative at -6.7, suggesting that on balance, respondents continued to view the business climate as worse than normal. The employment index rose five points to 6.2, signaling a small increase in employment levels, and the wages index fell six points to 30.5. The prices paid index fell four points to 51.9, a level which indicates a slight slowing in the pace of input price increases, and the prices received index fell seven points to 9.2, pointing to smaller selling price increases. The current capital spending index fell to 2.3, while the future capital spending index remained fairly high at 18.7. Indexes for the six-month outlook conveyed a strong degree of optimism about future conditions, with a particularly strong gain in the future employment index, which reached a multiyear high.
Business activity expanded in the region’s service sector, according to the April 2014 survey. After falling below zero in February and March, likely due in part to harsh winter weather in the region, the business activity index rose fifteen points to 12.7. The business climate index also climbed significantly, but remained negative at -6.7, suggesting that the business climate continued to be viewed as worse than normal, though to a much lesser extent than in February and March.
The employment index rose five points to 6.2, signaling a modest increase in employment levels. The wages index fell six points to 30.5, a level which points to a slowing in wage increases. The prices paid index fell four points to 51.9, indicating a slight slowing in the pace of input price increases, and the prices received index fell seven points to 9.2, pointing to smaller selling price increases. The capital spending index fell seven points to 2.3, suggesting little change in capital expenditures.
Outlook Remains Optimistic
Indexes for the six-month outlook continued to convey strong optimism about future conditions. The index for expected business activity was slightly lower, but remained high at 40.2. The index for future business climate also dipped, but held fairly strong at 27.1. The index for expected employment climbed nine points to 34.2, a multiyear high, and the index for future wages inched up to 42.6. The forward-looking prices paid index was little changed at 61.0, and the future prices received index fell six points to 27.6. The index for expected capital spending fell four points to 18.7.
The Business Leaders Survey is a monthly survey conducted by the Federal Reserve Bank of New York that asks companies across its District – which includes New York State, Northern New Jersey, and Fairfield County, Connecticut – about recent and expected trends in key business indicators. This survey is designed to parallel the Empire State Manufacturing Survey, though it covers a wider geography and the questions are slightly different. Participants from the service sector respond to a questionnaire and report on a variety of indicators' both in terms of recent and expected changes. While January 2014 is the first published report, survey responses date back to September of 2004 and all historical data are available on our website.
The survey is sent on the first business day of each month to the same pool of about 150 business executives, usually the president or CEO, in the region's service sector. In a typical month, about 100 responses are received by around the tenth of the month when the survey closes.
Respondents come from a wide range of industries outside of the manufacturing sector, with the mix of respondents closely resembling the industry structure of the region.
The survey's headline index, general business activity, is a distinct question posed on the survey (as opposed to a composite of responses to other questions). Currently, no indexes are seasonally adjusted since none of the series exhibits stable seasonal patterns from a statistical perspective.