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The Federal Reserve Bank of New York’s October 2014 Business Leaders Survey indicates that growth picked up in the region’s service sector. The survey’s headline business activity index rose nine points to 10.2. The business climate index fell three points to -14.0, suggesting that on balance, respondents continued to view the business climate as worse than normal. The employment index was little changed at 13.3, pointing to a continued increase in employment levels, and the wages index fell six points to 28.1, indicating a slower pace of growth in wages this month. The prices paid index climbed eight points to 53.1, signaling a pickup in input price increases, while the prices received index fell six points to 11.7, pointing to a slower pace of selling price increases. Both the current and future capital spending indexes were higher, indicating a rise in capital spending and spending plans. Indexes for the six-month outlook suggested a somewhat lower degree of optimism about future conditions compared with the last several months.
Growth in business activity picked up in the region’s service sector this month, according to the October 2014 survey. The business activity index climbed nine points to 10.2, pointing to a faster pace of growth in activity compared with last month. This month, 31 percent of respondents reported that conditions improved, while 21 percent reported that conditions worsened. The business climate index fell three points to -14.0, suggesting that on balance, the business climate continued to be viewed as worse than normal.
Employment Expands, Wage Growth Slows
The employment index was little changed at 13.3, signaling a continued moderate pickup in hiring activity. The wages index fell six points to 28.1, pointing to a slower pace of wage growth. The prices paid index rose eight points to 53.1, indicating a sharper pace of input price increases. The prices received index fell six points to 11.7, signifying a slower pace of growth in selling price increases. The capital spending index rose seven points to 19.1, suggesting that capital expenditures rose at a solid clip.
Level of Optimism Falls
Indexes for the six-month outlook continued to convey a positive outlook about future business conditions, but most indexes fell, indicating a somewhat lower level of optimism compared with previous months. The index for expected business activity fell six points to 30.7, and the index for future business climate fell thirteen points to 10.1, its lowest level in a year. The index for expected employment rose sharply, climbing fourteen points to 30.0, suggesting that employment is expected to climb in the months ahead. The future prices paid index rose eleven points to 58.8, while the future prices received index fell ten points to 20.0. The index for expected capital spending rose fourteen points to 24.2, indicating a significant pickup in capital spending plans.
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.