Business Activity Growth Eased in April
The month-over-month services composite index was 3 in April, down from 15 in March, and 6 in February (Tables 1 & 2). The composite index is a weighted average of the revenue/sales, employment, and inventory indexes. Overall growth in consumer and business services cooled from last month, driven primarily by declines in wholesale trade and real estate activity. Month over-month indexes were mixed. Most month-over-month indexes declined from last month except credit conditions, prices indexes, and wages and benefits. The monthly general revenue/sales index fell from 18 to 6, along with the three employment indexes. The year-over year composite index was unchanged at 8. Capital expenditures continued to increase moderately from last year. Expectations for future activity in the services sector continued to increase, driven primarily by general revenue/sales.
Services Composite Indexes
Skip to data visualization table| Date | Vs. a Month Ago | Vs. a Year Ago |
|---|---|---|
| Apr-25 | 2 | 11 |
| May-25 | 8 | 8 |
| Jun-25 | 2 | 11 |
| Jul-25 | -3 | 1 |
| Aug-25 | 3 | 12 |
| Sep-25 | -6 | 3 |
| Oct-25 | -4 | 8 |
| Nov-25 | -6 | 6 |
| Dec-25 | 1 | -1 |
| Jan-26 | 2 | 19 |
| Feb-26 | 6 | 11 |
| Mar-26 | 15 | 8 |
| Apr-26 | 3 | 8 |
Composite Indexes vs. a Year Ago by Sector
Skip to data visualization table| Date | Consumer Services | Business Services |
|---|---|---|
| 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 |
| Nov-25 | 11 | -5 |
| Dec-25 | 1 | -2 |
| Jan-26 | 22 | 10 |
| Feb-26 | 12 | 11 |
| Mar-26 | 11 | 0 |
| Apr-26 | 9 | 6 |
Special Questions
This month, contacts were asked special questions about changes in energy costs and ability to pass through energy-related costs. Almost three-quarters (73%) of firms reported that they have experienced higher transportation costs in the last two months, 27% experienced no change in transportation costs, 38% of firms experienced higher heating (natural gas) costs, 61% experienced no change in their heating costs, and 1% experienced lower heating costs. Over a third (36%) of firms experienced higher electricity costs in the last two months, while 64% of firms experienced no change in their electricity costs (Chart 3). Firms were also asked about their ability to pass on higher energy-related cost increases to their customers. Eighty percent of firms that have experienced higher energy-related costs will pass on 0-20% of their higher energy-related costs, 4% will pass on 21-40% of their costs, 2% will pass on 41-60% of their costs, 2% will pass on 61-80%, 8% will pass on 81-100%, and 4% of firms have had to decrease prices (Chart 4).
Selected Services Comments
“The continued uncertainty/chaos makes it very difficult to forecast and do business.”
“Not sure in a competitive market how much longer we can hold prices due to fuel costs.”
“Most of our input prices are greatly reduced as compared to the last 4 years. We are still experiencing higher than normal shipping costs.”
“Our budgets are being stretched due to energy prices.”
“If costs go up, we will raise prices.”
“Demand is slowing and our customers are feeling the pinch.”
“Uncertain times have made customers more cautious and worried about the future which has also affected employees.”
Survey Data
The views expressed are those of the authors and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.
Authors
Cortney Cowley
Assistant Vice President and Oklahoma City Branch Executive
