Business continued to rise moderately

Tenth District services activity continued to rise moderately in September, and expectations for future growth remained solid (Chart 1). Input and selling price indexes increased compared with a month ago and a year ago, and expectations for future selling prices also grew in September.

The month-over-month services composite index was 16 in September, similar to 17 in August, and up considerably from -1 in July (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Month-over-month indexes were mostly positive in September. The indexes for employment, wages and benefits, and capital expenditures increased, while the inventory index dipped into negative territory. The general revenue/sales index continued to expand, driven by increases in wholesale, auto, professional and business activity, and health services, while restaurant activity decreased. Year-over-year services indexes increased compared to last month, up from 15 to 26. Expectations for future services activity were unchanged at 18, as the future employment index increased, while the future inventory index decreased.

Composite Index vs. a Month Ago

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Date Composite
Sep-18 21
Oct-18 8
Nov-18 14
Dec-18 11
Jan-19 15
Feb-19 10
Mar-19 -2
Apr-19 12
May-19 15
Jun-19 1
Jul-19 -1
Aug-19 17
Sep-19 16

Special questions

This month contacts were asked special questions about employment levels and capital spending plans compared with their expectations from early 2019. Over 33 percent of regional business contacts indicated that their number of expected employees for 2019 was higher since the beginning of the year, and only 15 percent lowered expectations for 2019 employment levels (Chart 2). Regarding capital spending, more than 22 percent of firms have delayed their plans in 2019 and similarly, 22 percent have delayed their capital spending plans for 2020 (Chart 3). However, more than 15 percent of firms have accelerated their 2019 capital spending plans, and nearly 14 percent have accelerated their capital spending plans for 2020.

Selected Services comments

“We have big plans to migrate to cloud environments but capital is required to do this.”

“Business has slowed but we still need to buy new equipment and furnishings.”

“There is lots of uncertainty. Some raw materials are up 50% from tariffs.” 

“Business has been good, and we’re seeing growth in revenues that are in the upper single digits.”

“Capital expenditures have been up due to tornado damage but that is ending.”

“We are working fast to automate and reduce head count as competition dictates it.”

“Our employment expectations are materially growing, but we’re primarily off-shoring jobs due to the costs of labor in the U.S. with the skills we need.”

“Sales are lower and not as many employees needed. We were training employees anticipating a large sales increase that didn’t materialize.”

“Sales are up the past 3 months. We need more employees.”

“We have increased the number of expected employees as business has increased above 2nd half forecast.”

“New sales with existing customers have increased and we expect to hire some more employees in the 4th quarter.”

Survey Data

PDFCurrent Release

Excel SpreadsheetHistorical Monthly Data

About the Services Surveys


Chad Wilkerson

Senior Vice President and Oklahoma City Branch Executive

Chad Wilkerson serves as Oklahoma City Branch Executive and Senior Vice President of Community Development for the Federal Reserve Bank of Kansas City. Wilkerson has been with th…