Business Activity Expanded

Tenth District services activity rose slightly in November but still lagged year-ago levels, while expectations for future activity increased (Chart 1 & Table 1). The indexes for input and selling prices continued to grow, but at a slower pace than a month ago. Firms expected input and selling prices to increase in the next six months.

The month-over-month services composite index was 10 in November, slightly lower than 12 in October, but up from -7 in September (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 in November. The general revenue and sales index remained positive, driven by more wholesale, transportation, professional, technical, and health services activity. However, auto, tourism, and restaurant activity declined. The inventory and access to credit indexes dipped back into negative territory, while the indexes for employee hours and parttime employment were flat. On the other hand, the employment, wages and benefits, and capital expenditures indexes were positive, indicating expansion. Year-over-year indexes remained negative in November, but slightly less so, as the year-over-year composite moved from -19 to -16. Expectations for future services activity increased, and the composite index expanded from 7 in October to 13 in November.   

Services Composite Indexes

Skip to data visualization table
Date Vs. a Year Ago Vs. a Month Ago
Nov-19 31 9
Dec-19 25 15
Jan-20 20 14
Feb-20 20 6
Mar-20 -4 -16
Apr-20 -46 -58
May-20 -41 -21
Jun-20 -32 3
Jul-20 -20 20
Aug-20 -24 20
Sep-20 -23 -7
Oct-20 -19 12
Nov-20 -16 10

Special questions

This month contacts were asked special questions about hiring restraints and how developments surrounding COVID-19 have affected online business strategies. Nearly half of businesses reported an inability to find skilled workers and the lack of qualified applicants was one of the biggest factors restraining hiring plans (Chart 2). A majority of firms also restrained hiring plans due to uncertainty about the pandemic or Coronavirus related regulations, and nearly 45% of firms restrained hiring plans to keep operating costs low. Concerning online business, over half of businesses indicated that developments surrounding COVID-19 affected their company's online business strategy. Nearly 40% of firms expanded their existing online business, while 11% implemented an online business segment, and 15% of firms have plans to create an online segment in the future (Chart 3). About a quarter of firms made no changes to their existing online business, while another 10% do not have an online business and have no plans to implement one in the future.

Selected Services comments

“The uncertainty around governmental programs to help businesses with COVID issues has caused apprehension across our business and industry. Changing or unclear rules on employment makes decisions on hiring or laying off employees challenging.”

“The increase in infection rate is adding more instability to the work environment as governments issue additional shutdown policies to help curve the virus.”

“Coronavirus has scared many people from the dining rooms this month and seems to be getting worse.”

“COVID- round 2 during the winter months is going to hurt business. Keeping dining rooms closed for the protection of my employees is critical to staying open. Seeing COVID outbreak much higher in last 30 days in our area.”

“COVID is killing us. We were profitable in Jan, Feb, but have been negative every month since and are bleeding cash. We will have to make hard decisions about staffing for 2021 which means some combination of reduced wages, furloughs, and position cuts.”

“We are very slow to hire so we don't have to lay off; sales need to substantially increase before hiring.”

“It's hard to find people… that want to learn a job and stick with it.”

“Many job applicants cannot pass screening requirements.”

“We are finally finding plenty of job applicants and workers. Business was improving up until the most recent COVID spike. We have increased the team incentives on the margin instead of straight hourly wage increases.”

“Store sales are down 15% and continue to decline. Online sales growth continues to be strong but has plateaued. Workers (all essential) are getting weary.”

“The election mess and the continued unrest causes us concern for future business investment.” 

Survey Data

PDFCurrent Release

Excel SpreadsheetHistorical Monthly Data

About the Services Survey


Chad Wilkerson

Senior Vice President and Oklahoma City Branch Executive

Chad Wilkerson serves as Oklahoma City Branch Executive and Senior Vice President for the Federal Reserve Bank of Kansas City. Wilkerson began his career with Federal Reserve in …