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December 16, 2016

Just Released: Regional Business Surveys Point to Growth in Economic Activity


The latest editions of the New York Fed’s two regional business surveys point to improvement in business conditions and widespread optimism about the near-term outlook. The December Business Leaders Survey of regional service firms, released today, shows service sector activity steadying after declining for a number of months, and the December Empire State Manufacturing Survey, released yesterday, indicates that manufacturing activity increased for the first time since the summer.

The Empire Survey’s headline index had been below zero for much of the past two years, and the Business Leaders Survey’s headline index had been in negative territory since August. Given the way that these diffusion indexes are calculated, negative readings mean that more of our survey panelists had been reporting that activity was declining than growing. (If you are unfamiliar with the survey or how the diffusion indexes are calculated, you can learn more here). But our latest surveys, conducted over the first twelve days of December, show some improvement: Among manufacturers, those seeing growth in activity outnumbered those seeing a decline by a modest margin, and among service firms, these two sides were roughly equal. These findings jibe with indications that manufacturing activity has seen a modest pickup recently at the national level.

A striking finding in the December surveys is just how much more optimistic firms have become about future conditions. Service-sector panelists are more upbeat about the near-term outlook than they’ve been in almost a year, and manufacturers are more optimistic than they’ve been in nearly five years.

While the general tenor of this month’s survey results is certainly encouraging, the labor market remains a sore spot. Manufacturers report that they continue to reduce both headcounts and hours worked, and hiring remains modest among service-sector firms. Still, the surveys indicate a widespread expectation that hiring will pick up in the months ahead. All in all, this month’s regional business surveys provide some encouragement that economic activity, as well as hiring, may well pick up as we move into 2017.


The views expressed in this post are those of the authors and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the authors.

Bram_jasonJason Bram is an officer in the Federal Reserve Bank of New York’s Research and Statistics Group.

Deitz_richardRichard Deitz is an assistant vice president in the Group.

How to cite this blog post:

Jason Bram and Richard Deitz, “Just Released: Regional Business Surveys Point to Growth in Economic Activity,” Federal Reserve Bank of New York Liberty Street Economics (blog), December 16, 2016,

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