The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.
The Outreach and Education function engages, empowers and educates the Second District communities that the Bank serves, especially civic leaders, students, educators, small business owners, policymakers and the general public. It furthers the Bank's commitment to the region by listening to the communities we serve and leveraging our unique attributes to positively impact school and university programs, as well as analysis and research.
The Federal Reserve Bank of New York’s March 2015 Business Leaders Survey indicates that activity in the region’s service sector remained flat for a second consecutive month. The survey’s headline business activity index was little changed at -0.7. The business climate index fell five points to -13.2, signaling that, on balance, respondents viewed the business climate as worse than normal. The employment index held steady at 15.4, pointing to continued solid gains in employment, and the wages index climbed for a third consecutive month, rising seven points to 41.9, an indication that wage increases picked up. The prices paid index fell ten points to 41.2, pointing to a slower pace of input price increases, while the prices received index climbed six points to 11.9, signifying a faster pace of selling price increases. Although business activity appeared flat over the month, indexes assessing the six-month outlook suggested that firms were very optimistic about future conditions, with the future business activity index reaching a record high.
Business Activity Stalls for Second Consecutive Month
Business activity stalled in the region’s service sector for a second consecutive month, according to the March 2015 survey. The survey’s headline business activity index was little changed at -0.7. This month, 28 percent of respondents reported that conditions improved, and 29 percent reported that conditions worsened. The business climate index fell five points to -13.2, indicating that, on balance, firms viewed the business climate as worse than normal.
Wage Growth Accelerates
At 15.4, the employment index was little changed from February, pointing to continued moderate gains in employment levels. The index for wages rose for a third consecutive month, climbing seven points to 41.9, a sign that the pace of growth in wages continued to pick up. The wages index has risen a cumulative sixteen points since December. The prices paid index fell ten points to 41.2, indicating that input price increases slowed. The prices received index climbed six points to 11.9, pointing to a pickup in selling price increases. The capital spending index edged down to 12.6, suggesting continued growth in capital expenditures.
Hefty Gains Expected
Despite the lack of growth in business activity this month, indexes assessing the six-month outlook suggested that firms remained very optimistic about future business conditions. The index for expected business activity surged seventeen points to 54.0, a record high, and the index for future business climate climbed to 35.0. The index for expected employment rose seven points to 32.8. The index for expected wages was unchanged, suggesting that respondents continue to expect faster wage growth in the months ahead. The index for expected capital spending advanced nine points to 24.6.
The Business Leaders Survey is a monthly survey conducted by the Federal Reserve Bank of New York that asks companies across its District – which includes New York State, Northern New Jersey, and Fairfield County, Connecticut – about recent and expected trends in key business indicators. This survey is designed to parallel the Empire State Manufacturing Survey, though it covers a wider geography and the questions are slightly different. Participants from the service sector respond to a questionnaire and report on a variety of indicators' both in terms of recent and expected changes. While January 2014 is the first published report, survey responses date back to September of 2004 and all historical data are available on our website.
The survey is sent on the first business day of each month to the same pool of about 150 business executives, usually the president or CEO, in the region's service sector. In a typical month, about 100 responses are received by around the tenth of the month when the survey closes.
Respondents come from a wide range of industries outside of the manufacturing sector, with the mix of respondents closely resembling the industry structure of the region.
The survey's headline index, general business activity, is a distinct question posed on the survey (as opposed to a composite of responses to other questions). Currently, no indexes are seasonally adjusted since none of the series exhibits stable seasonal patterns from a statistical perspective.