Philadelphia Fed Nonmanufacturing Business Outlook Survey

Data PMI

Source: Philadelphia Fed
Source Link: https://www.philadelphiafed.org/
Frequency: Monthly
Next Release(s): October 21st, 2025 8:30 AM

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The Philadelphia Fed’s September 2025 Nonmanufacturing Business Outlook Survey showed regional activity at -12.3 (Aug: -17.5) while firm-level activity eased to 5.8 (Aug: 24.6), signaling softer services conditions despite still-positive company-level growth.
- New Orders dropped sharply to 0.5 (Aug: 21.5), with nearly equal shares of firms reporting increases and decreases.
- Sales/Revenues held steady at 17.9 (Aug: 17.5), near the long-run average and the highest since October 2024.
- Full-time employment improved to 9.4 (Aug: -3.8), its strongest since May, while part-time employment weakened further to -7.3.
- The Average Workweek eased to 10.5 (Aug: 17.3), showing slower growth in hours worked.
- Prices Paid declined slightly to 38.8 (Aug: 43.2) but remained elevated, while Prices Received ticked up to 21.8 (Aug: 20.1).
- Future activity at the firm level fell to 12.1 (Aug: 21.2) but stayed positive; regional expectations turned negative at -8.4.
- Special questions: 60% of firms expected Q3 sales/revenues to increase, 25% anticipated declines; 86% cited uncertainty as a business constraint, and over 60% reported labor supply issues. Nearly half (47%) expected uncertainty to worsen over the next three months.
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The Philadelphia Fed’s August Nonmanufacturing Business Outlook Survey showed firm-level activity rising to 24.6 (from 10.2 in July), its highest since March 2022, signaling stronger expansion despite weaker employment.
- The New Orders Index climbed to 21.5 (from 9.7), while Sales/Revenues rose to 17.5 (from 11.8), both at their strongest levels in nearly three years.
- Regional activity fell to -17.5 (from -10.3), highlighting divergence between local conditions and firm-level performance.
- Full-time employment dropped to -3.8 (from 4.1) and part-time slipped to -2.8 (from -1.4), showing labor softness even as the average workweek rose to 17.3 (from 12.5).
- Prices Paid surged to 43.2 (from 32.5), and Prices Received increased to 20.1 (from 12.4), indicating elevated cost pressures and stronger pricing power.
- Future firm-level activity expectations rose to 21.2 (from 11.7), while regional expectations turned positive at 1.3 (from -3.9), suggesting broader optimism ahead.
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The Philadelphia Fed’s Nonmanufacturing Business Outlook Survey showed a return to expansion in July 2025, with the General Activity Index at the firm level rising to 10.2 from -17.3—the first positive reading since January.
- New Orders Index jumped to 9.7 (from -20.1), and Sales/Revenues rose to 11.8 (from 3.4), both at their highest levels since October.
- Full-time employment turned positive at 4.1 (from -2.1), though part-time employment dipped slightly to -1.4.
- Prices Paid increased to 32.5 (from 29.7), while Prices Received rose to 12.4, just below the long-run average.
- The average workweek rose to 12.5, and wage & benefit cost expectations remained elevated, with firms anticipating a 2–3% median increase in wages.
- Firms continue to expect moderate growth ahead: the Future Activity Index at the firm level eased slightly to 11.7, with 39% of respondents expecting higher activity over the next six months.
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The Philadelphia Fed Nonmanufacturing Business Outlook Survey showed continued weakness in June, with the General Activity Index at the firm level declining to -17.3 (from -16.3), while the regional index rose 16 pts to -25.0, remaining in negative territory.
- The New Orders Index dropped -3.8 pts to -20.1, while the Sales/Revenues Index turned positive, rising 8.9 pts to 3.4.
- Full-time employment slipped to -2.1 (from +11.3), though part-time employment edged up to 0.1 and the average workweek rose to 9.0 (from -4.8).
- Prices Paid held steady at 29.7, near the long-run average; Prices Received eased to 2.2, with most firms reporting no change.
- Capital expenditures improved: equipment/software rose to 17.3 and physical plant spending turned positive at 6.5.
- Over 45% of firms expect higher Q2 sales vs. Q1; uncertainty (88%) and supply chains (52%) were widely cited as business constraints.
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The Philadelphia Fed Nonmanufacturing General Business Activity index rose 10.4 pts to -16.3 in May, remaining negative for the fourth straight month but showing some improvement.
- The New Orders index fell -9.4 pts to -16.3, while the Sales/Revenues index rose 2.3 pts to -5.5.
- The Full-Time Employment index jumped 18.5 pts to 11.3, the highest since Jan 2024; however, Part-Time Employment declined -4.0 pts to -11.9.
- The Prices Paid index fell -16.9 pts to 29.6, aligning with its long-run average, while Prices Received rose to 4.0.
- Future general activity at the firm level turned positive, rising to 11.6, while the regional outlook remained pessimistic at -30.6.
- Firms expect 2.0% price increases for their own goods (vs 2.0% in Feb survey) and 4.0% growth in compensation costs over the next year (vs 3.0% in Feb survey).
- Firms' general inflation expectations increased significantly. They now anticipate 4.8% inflation for all US consumers for both the next year and the 10-year average, up sharply from February's survey which showed expectations of 3.3% and 3.1% respectively.
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The Philadelphia Fed Nonmanufacturing General Business Activity index dropped -9.2 pts to -26.7 in April, the third straight negative reading and the lowest since May 2020.
- The regional activity index fell -10 pts to -42.7, its lowest reading since May 2020.
- The New Orders index actually rebounded 12.6 pts to -6.9, while the Revenues index fell -3.1 pts to -7.8.
- The Unfilled Orders and Inventories indexes both pointed to larger contractions, down -6.6 pts to -13.1 and down -8.9 pts to -11.7 respectively.
- The Prices Paid index saw another large increase, up 10.5 pts to 46.5, the highest reading since February 2023, with almost 54% of firms noting higher input prices.
- The index for future general activity at the firm level, which had turned negative last month for the first time since April 2020, declined -3 ps to -23.0.
- The employment indexes, tracking full-time, part-time, and workweek, are all pointing to a decline.
- The median expected changes for non-energy raw materials costs and intermediate goods costs both increased from 1-2% in the January 2025 survey to 3-4% in the April 2025 survey.
- Firms’ expectations of spending on health and nonhealth benefits dropped significantly indicating that services firms might try and offset higher costs of nonlabor costs by reducing labor costs.
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The Philadelphia Fed Nonmanufacturing General Business Activity index fell from -12.9 in February to -17.5 in March.
- The current regional activity index fell further into negative territory to -32.5, its lowest reading since May 2020.
- The future general activity indexes suggest that the respondents expect continued declines in activity overall over the next six months, with both series falling to their lowest readings since April 2020.
- The New Orders index dropped -18.2 pts to -19.5, the lowest reading since April 2023, but the Sales index actually increased by 8.0 pts to -4.7.
- The Prices Paid index jumped 12.6 pts to 36.0, and the Prices Received index flipped from a slight contraction to a moderate increase at 8.4.
- The Full-Time Employment index dropped 10.0 pts to -7.5 with only 7.9% of firms reporting an increase in full-time employment.
- 61.4% of firms said that “uncertainty” is going to become a larger constraint on business in the next three months.
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The Philadelphia Fed Nonmanufacturing General Business Activity index fell -15.1 pts to -12.9 in February with the expectations activity index easing -12.0 pts to 13.8.
- New Orders and Sales are now declining with the former index down -2.9 pts to -1.3 and latter down -15.3 pts to -12.7.
- Unfilled orders flipped from moderately increasing to moderately declining, down -26.0 pts to -7.9.
- Prices Paid eased slightly to 23.4 but only 6.6% of firms reported costs declining. Prices Received remained slightly negative, down -0.8 pts to -1.1.
- Full time employment was barely positive at 2.5, but the average workweek index descended -11.5 pts to -7.5.
- Inflation expectations have cooled substantially according to the quarterly special question. The median firm expects prices received will grow 2.0% in the next year, down from the median of 2.8% in the November survey.
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The Philadelphia Fed Nonmanufacturing Business Outlook Survey General Business Activity (firm-level) index fell -2.4 pts to 2.2 in January. The New Orders index increased 5.0 pts to 1.6, but the Sales/Revenues index eased -0.6 pts to 2.6. Firms saw a much faster increase in unfilled orders with that index at 18.1, and inventories were barely decreasing at -0.5.

A significant result was the -23.6 pt drop in the Prices Received index to -0.3, the lowest reading since early 2023. Despite the dissipation of selling price inflation, Prices Paid remained elevated at 28.9 (though down -1.9 pts from the December reading). Full-time employment was barely increasing at 1.5 while part-time employment flipped from a moderate increase of 8.9 to a slight decline at -0.3 in January.

In general, firms saw cost growth slowing in 2025. Non-labor cost growth is expected to moderate significantly with energy and other commodities medians in the 1%-2% range. Labor cost growth is also expected to moderate, but to a lesser extent. Average total compensation growth was around 6.5% in 2024 and firms expect that segment of costs to grow another 5.5% in 2025.

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The Philadelphia Fed Nonmanufacturing Survey general business activity index was mostly unchanged at -6.0 in December, slightly below the -5.9 in November. New orders saw a sharper decline at -6.1, down from -4.3 previously, and sales were only increasingly by a small margin, dropping from 3.1 to 1.8.

Employment also saw a slower increase with the full-time employee index down -1.9 pts to 3.5, and the part-time employee index down -1.8 pts to 8.9. Despite that, the index tracking compensation costs jumped sharply by 12.7 pts to 43.2 as no firms reported compensation costs falling.

Inflationary pressures were also evident. Both the prices paid and prices received index increased with the former up 8.2 pts to 30.9, and the latter seeing a very large increase of 23.5 pts to 24.0.

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