Responses to the September Nonmanufacturing Business Outlook Survey suggest that nonmanufacturing activity continued to expand in the region. The firm-level index of general activity, new orders, and sales/revenues all remained elevated, while the full-time employment index continued its recent climb. The respondents continued to report overall increases in prices of both their own goods and their inputs. The firms anticipate growth for their own firms and the region over the next six months.

Firms Report Overall Growth
The diffusion index for current general activity at the firm level rose from 41.1 in August to 46.8 in September. More than 50 percent of the firms reported increases in activity, compared with 4 percent that reported decreases. The new orders index fell 2 points to 26.7. The share of firms reporting increases in new orders (33 percent) exceeded the share reporting decreases (6 percent). The sales/revenues index rose from 40.5 in August to 42.8 in September, its highest reading since February 2015. Nearly 50 percent of the responding firms reported increases in sales/revenues, while 7 percent reported decreases. The regional activity index fell 4 points to 37.4.

Employment Indicators Remain Elevated
The survey’s labor market indicators remained strong in September. The full-time employment index increased from 32.2 in August to 36.7 in September. This marks the third consecutive month that the series has reached an all-time high. Although most firms (51 percent) continue to report steady full-time employment levels, the share of firms reporting increases (43 percent) was considerably higher than the share reporting decreases (6 percent). The part-time employment index edged down less than 1 point to 21.1, while the wages and benefits indicator edged up from 46.4 to 48.1. The average workweek index rose 9 points to 25.1, with only 1 percent of the firms reporting decreases in their average employee workweek.

Price Indicators Remain Stable
Both price indicators remained near last month’s readings and continue to suggest overall increases in prices for inputs and for firms’ own goods and services. The prices paid index edged down 1 point to 26.3. Although the majority of firms (56 percent) reported stable input prices, 28 percent of the respondents reported increases, while only 2 percent reported decreases. With respect to prices for firms’ own goods and services, the prices received index edged down from 26.9 in August to 24.3 in September but remains elevated. While 24 percent of the firms reported increases in prices received, no firms reported decreases. More than half of the firms reported no change in their own prices.

Firms Expect Growth to Continue
Both future activity indexes remained elevated above their long-term averages in September. The diffusion index for future activity at the firm level increased from 50.7 to 53.6. Over 65 percent of the firms expect an increase in activity at their firms over the next six months, compared with 12 percent that expect a decline. The future regional activity index edged down less than 1 point from last month to 45.6.

Summary
Responses to September’s Nonmanufacturing Business Outlook Survey suggest that nonmanufacturing activity continued to expand in the region. The firm-level general activity index rose moderately, while sales/revenues edged up. Responding firms continued to report overall increases in full-time employment and remain optimistic about growth over the next six months.