Business Rose Moderately in February

The month-over-month services composite index was 10 in February, down slightly from 15 in January and 11 in December (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Month-over-month indexes were somewhat mixed. The general revenue/sales index declined in February due to slower wholesale and retail trade activity, while healthcare services activity expanded. The employment index dipped into negative territory for the first time since mid-2016, while the inventory index rose above zero. Most year-over-year services indexes edged lower. Compared with a year ago, the services composite index dipped from 21 to 15. Expectations for future services activity grew moderately, with the future composite index increasing from 17 to 25.

Special Questions

This month contacts were asked special questions about tightening labor market conditions, specifically worker shortages and wage gains. More than 74 percent of services contacts reported workers were in short supply, and nearly 54 percent indicated they were having to raise wages more than normal to attract or retain employees (Chart 2). On average in 2018, 32 percent of firms reported 2 to 4 percent wage gains, while 38 percent of firms said wage gains were greater than 4 percent (Chart 3). In 2019, respondents overall expect their firms to increase wages at slightly slower rates than in 2018. Approximately 39 percent of firms expecting wage increases of 2 to 4 percent, while another 26 percent of firms expect wage gains of more than 4 percent in 2019.

Composite Index vs. a Month Ago

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Date Composite
Feb-18 18
Mar-18 13
Apr-18 18
May-18 12
Jun-18 17
Jul-18 13
Aug-18 10
Sep-18 21
Oct-18 8
Nov-18 14
Dec-18 11
Jan-19 15
Feb-19 10

Selected Services Comments

“We have had demand for our services greater than our capacity for 18 months. Shortage of labor, specifically professional truck drivers, is the constraint that has prevented our firm from growth.”

“Weather has continued to impact construction activity - particularly in late January and February but start of the impact began in November."

“We opened one new retail store in fall 2018. We will wait to see sales before thinking about another.”

“There are not enough trained employees in the work force for us to hire to continue our growth.”

“Our sector has been consistently growing because of the affordability of Oklahoma real estate and rental rates remaining steady, coupled with low taxes and insurance cost.”

“There is probably one technology worker available for every two jobs. Employers are getting into bidding wars to attract employees.”

“Low unemployment levels make hiring of common labor positions more difficult.”

“We are in short supply of all kinds [of workers], but especially anyone who is required to work outdoors or in the weather.”

“Driver and mechanic wages have gone up as much as 25% in the last year.”

Survey Data

PDFCurrent Release

Excel SpreadsheetHistorical Monthly Data

About the Services Survey


Chad Wilkerson

Vice President, Economist and Oklahoma City Branch Executive

Chad Wilkerson is Branch Executive of the Kansas City Fed’s Oklahoma City Branch office. In this role, he serves as the Bank’s lead officer and regional economist in Oklahoma. He…