Business Activity Fell Modestly in July
The month-over-month services composite index was -5 in July, down from 3 in June and 11 in May (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Activity in the real estate, tourism, and hotel sectors grew, while the wholesale trade sector continued to decline. The month-over-month indexes were mixed. General revenue/sales cooled further from 2 to -8, and employment and employee hours both decreased to -6. Year-over-year growth eased from 11 to 1, and revenues decreased slightly from 7 to –2 (Chart 2). Capital expenditures increased modestly from 4 to 6. Expectations for future services activity remained positive, as firms’ anticipated revenue and employment growth continued to be favorable.
Services Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| 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 |
| Apr-25 | 3 | 11 |
| May-25 | 11 | 8 |
| Jun-25 | 3 | 11 |
| Jul-25 | -5 | 1 |
Composite Indexes vs. a Year Ago by Sector
Skip to data visualization table| Date | Consumer Services | Business Services |
|---|---|---|
| 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 |
| Apr-25 | 10 | 12 |
| May-25 | 9 | 5 |
| Jun-25 | 8 | 17 |
| Jul-25 | -7 | 17 |
Special Questions
This month contacts were asked special questions about profit margins and passthrough ability. A significant portion of firms (41%) reported that in the previous quarter there was a slight decrease in profit margins, while 15% reported a significant decrease 14% reported no change, 26% reported a slight increase, and 4% reported a significant increase. In the next 12 months, 40% of firms expected margins to slightly decrease, 13% expected a significant decrease, 16% expected no change, 28% expected a slight increase, and 3% a significant increase (Chart 3). Additionally, 41% of firms reported that over the last few months their ability to pass through rising input prices has not changed, 33% reported it is harder to pass through costs, 23% reported a slight increase in ability, and 3% of firms reported a considerable increase (Chart 4).
Selected Services Comments
“Customers are more careful on spending and number of visits. Also, we are seeing more new competition of dining places in the area.”
“Existing home listings are up versus last month and last year, but sales are slow due to asking prices that are too high because of either paying too much during the Covid years, or interest rates being high enough to suppress demand. This development is not a bust but a welcome reset to proper pricing according to the market.”
“Business has slowed dramatically.”
“Business seems to be chugging along very steady. Overall business is good”
“Business volume has been softening for several months. People are pulling back on their travel and spending.”
“We have always maintained a debt free business. However, it is becoming harder to maintain our liquidity. We are reverting back to the days when we first started when owners had to fund expenses to stay afloat.”