The region’s services sector continues to experience solid growth, according to the New York Fed’s February Business Leaders Survey. The survey’s business climate index reached a record high, and the activity, employment, and capital spending indexes were all fairly steady at high levels, indicating continued expansion. Firms were increasingly optimistic about future business conditions, and strong gains in employment were expected in the months ahead. Notably, price pressures picked up, with the prices paid index advancing to a level not seen since 2014, and the prices received measure reaching its highest mark in six years.
The February report indicates that the region’s services sector is continuing to expand at a fairly robust pace. The survey’s headline business activity index spent a fourth consecutive month above 15, a feat not achieved in a number of years. Furthermore, the business climate index rose to 21.1, its highest reading in the history of the survey, suggesting that firms assessed the overall business climate as the most favorable it has been in at least a decade. Indexes assessing the six-month outlook signaled that firms expected business activity to continue to grow in the months ahead.
On the pricing front, input price increases accelerated, with the prices paid index cresting to its highest level in more than three years. Of note, the prices paid index in the February Empire State Manufacturing Survey rose to its highest level in over five years. Similarly, selling price increases in the Business Leaders Survey also picked up, with the prices received index reaching a multiyear high.
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.
Jason Bram is an officer in the Federal Reserve Bank of New York’s Research and Statistics Group.
Richard Deitz is an assistant vice president in the Research and Statistics Group.
How to cite this blog post:
Jason Bram and Richard Deitz, “Just Released: Very Favorable Business Climate Indicated in February Business Leaders Survey,” Federal Reserve Bank of New York Liberty Street Economics (blog), February 16, 2018, http://libertystreeteconomics.newyorkfed.org/2018/02/just-released-very-favorable-business-climate-indicated-in-february-business-leaders-survey.html.