Business Activity Rose Somewhat in August
The month-over-month services composite index was 4 in August, up from -5 in July, and 3 in June (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Activity in real estate, wholesale trade, and health services sectors grew, while growth in tourism cooled. Most month-over-month indexes were positive, except access to credit, employee hours worked, and part-time/temporary employment. General revenue/sales jumped from -8 to 5, and employment grew from -6 to 2. Year-over-year growth increased from 1 to 12, and revenues rose from -2 to 16 (Chart 2). Capital expenditures inched higher from 6 to 8. Expectations for future services activity remained positive, as firms anticipate increasing revenue.
Services Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| Aug-24 | 4 | 10 |
| 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 |
Composite Indexes vs. a Year Ago by Sector
Skip to data visualization table| Date | Consumer Services | Business Services |
|---|---|---|
| Aug-24 | 10 | 8 |
| 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 |
Special Questions
This month, contacts were asked special questions about changes in purchasing activity and product demand expectations. Over a third (36%) of firms reported customers’ purchase volumes decreased slightly compared to last quarter, 8% reported a significant decrease, 32% reported no change, 23% reported a slight increase, and 1% reported a significant increase in purchase volumes. Compared to last quarter, approximately 33% of firms reported the count of customer purchases decreased slightly, 8% reported a significant decrease, 34% reported no change, 23% reported a slight increase, 1% reported they increased significantly (Chart 2). Approximately 37% of firms expect demand for their products to be slightly higher than the prior quarter for the remainder of 2025 and 2% expect it will be significantly higher, 28% expect no change, while 23% expect it will be slightly lower, and 10% expect it will be significantly lower (Chart 3).
Selected Services Comments
“We are seeing higher transaction counts and lower average check. Clearly customers are more price conscious the past couple months.”
“AI is helping us be more efficient with fewer employees - we are cutting costs dramatically (10%+) - more customers are saying they want to wait and see - lower budgets.”
“We anticipate a slight hiring increase over the next month.” “Lots of uncertainty in buyers.”
“Jan- Apr we saw incredible fear and lack of buying. Now we are seeing some light but still awful sales.”
“Lower income consumers not spending dollars at restaurants and eating at home more. Breakfast sales are not as strong as in past quarters. Will be lowering value meal pricing starting in September to work on value component with consumers.”
“The lower-income consumer does seem to be more stressed.”