Business Activity Was Unchanged in March
The month-over-month services composite index was 0 in March, down from 2 in February, and up from -4 in January (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Activity in tourism & hotels grew and declines eased in the wholesale, real estate, and professional services, and education sectors. Healthcare and retail activity fell further. The month-over-month indexes were mixed. General revenue/sales picked up from -1 to 4, while employment decreased from 3 to -5. Employee hours worked decreased to its lowest reading since May 2020 at -10. The year-over-year composite index cooled further from 6 to 2, as growth in the business sector eased and consumer activity remained flat (Chart 2). Revenues were steady, but employment fell from the previous year’s levels for the first time since April 2024. Capital expenditures and access to credit fell only slightly. Expectations for future services activity moderated but remain positive, with firms expecting lower sales and employment growth in the coming six months.
Services Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| Mar-24 | 7 | -2 |
| Apr-24 | 8 | 7 |
| May-24 | 10 | 4 |
| Jun-24 | 3 | 8 |
| Jul-24 | -3 | 3 |
| 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 |
Composite Indexes vs. a Year Ago by Sector
Skip to data visualization table| Date | Consumer Services | Business Services |
|---|---|---|
| Mar-24 | 0 | -5 |
| Apr-24 | 14 | -7 |
| May-24 | 7 | -2 |
| Jun-24 | 15 | -7 |
| Jul-24 | 20 | -30 |
| 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 |
Special Questions
This month contacts were asked special questions about profit margins and strategy changes. Slightly over half of firms reported decreased profit margins in the past 12 months. 34% (19%) of firms reported that their profit margins increased slightly (increased significantly) in the past 12 months, while 18% reported they did not change, and another 23% (6%) reported a slight decrease (significant decrease). Similarly, 41% (8%) of firms reported that they expect profit margins to increase slightly (increase significantly) in the next 12 months, while 21% expect no change, and another 29% (1%) expect a slight decrease (significant decrease) (Chart 3). Additionally, 60% of manufacturing firms surveyed reported that they were considering changes in strategy, management, sourcing of materials, or pricing to adapt to economic conditions this year (Chart 4).
Selected Services Comments
“Customers are feeling pinched while tariffs have elevated our input costs. The short-term economics for us look dreadful and that will have an effect on our employment and investment in the business”
“Many economic headwinds making growth very difficult.”
“Our sales increased this month. The adjusted interest rates and a reduction in our input costs is having a positive effect on consumers’ confidence.”
“Customers are cutting back.”
“Tariffs are killing us, just the thought of tariffs and the uncertainty they cause. Our stores are in high traffic shopping areas and all are quiet.”
“As a small business, we are finding it difficult to gain new business because we don't have the resources to compete with the bigger companies.”
“Some re-investment will be deferred until 2026 so we can recover from 4th quarter 2024.”
“We are expanding and adding staff. Still tough finding quality blue collar workers.”