Business Activity Fell Slightly in October
The month-over-month services composite index was -5 in October, up from -9 in September, and down from 4 in August (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Activity in the health services and tourism sectors grew, while real estate services activity continued to decline. The month-over-month indexes were mixed. The monthly general revenue/sales index eased slightly at -5, along with the employment index –reading of -4. Year-over-year growth edged up from 3 to 8. This growth was driven more by consumer-oriented firms, as the consumer index increased from 6 to 20. The revenues index rose from 5 to 14, along with the employment index from 1 to 6. Capital expenditures continued to increase from 14 to 17. Expectations for future services activity remained positive, with expectations for employment increasing.
Services Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| Sep-24 | 0 | 4 |
| Oct-24 | 5 | 9 |
| Nov-24 | 8 | 15 |
| Dec-24 | 4 | 24 |
| Jan-25 | -4 | 17 |
| Feb-25 | 2 | 6 |
| Mar-25 | 0 | 2 |
| Apr-25 | 3 | 11 |
| May-25 | 11 | 8 |
| Jun-25 | 3 | 11 |
| Jul-25 | -5 | 1 |
| Aug-25 | 4 | 12 |
| Sep-25 | -9 | 3 |
| Oct-25 | -5 | 8 |
Composite Indexes vs. a Year Ago by Sector
Skip to data visualization table| Date | Consumer Services | Business Services |
|---|---|---|
| Sep-24 | 8 | -5 |
| Oct-24 | 9 | 11 |
| Nov-24 | 19 | 5 |
| Dec-24 | 30 | 11 |
| Jan-25 | 25 | 2 |
| Feb-25 | 1 | 14 |
| Mar-25 | 1 | 4 |
| Apr-25 | 10 | 12 |
| May-25 | 9 | 5 |
| Jun-25 | 8 | 17 |
| Jul-25 | -7 | 17 |
| Aug-25 | 14 | 7 |
| Sep-25 | 6 | -3 |
| Oct-25 | 20 | -15 |
Special Questions
This month, contacts were asked special questions about profit margins and AI usage. Over a third of firms (37%) reported their profit margins slightly decreased this year, 18% reported a significant decrease, 21% reported no change, 21% reported a slight increase, and 3% reported their profit margins this year significantly increased. In 2026, 36% of firms expect their profit margins will slightly decrease, 5% anticipate a significant decrease, 16% anticipate no change, 39% anticipate a slight increase, and 4% anticipate a significant increase (Chart 2). Over half of firms (55%) reported that AI has not affected their business strategy or plans, while 23% of firms expanded their existing use of AI since the beginning of 2025, 13% started using AI, and 9% have not incorporated AI but plan to in the future (Chart 3).
Selected Services Comments
“Uncertainty about the next 12 to 18 month is high.”
“It appears that the hiring has softened. We have received far more qualified truck driver candidates compared to a year ago and we posted a staff position and receive over 100 applications within the first hour and much more than expected were qualified, i.e., degree with experience.”
“As a staffing company, we are noticing greater fluctuations in the level of job orders obtained from our clients. Thus, we are having to spend more time developing metrics to stay in business.”
“You post a job requirement - you will have 400 responses. Two years ago, you would be lucky to get 5.”
“For the last 9 days of October we were down 31% and the first 12 days of November are down 21%. That is the reason we have put a hiring freeze on. We are also making sure all employees get the minimum number of hours to pay their bills and do not plan on laying off anyone.”