March 30, 2017
Regional Surveys of Business Activity
Maryland Survey of Business Activity
Business Activity Improved in March; Expectations for Future Conditions Remained Upbeat
Overview
According to the latest survey results, business
activity in Maryland picked up somewhat in March.
The general business conditions index increased to 7,
while the sales index moved out of negative territory to
land at 0 in March. Labor market conditions improved
as relatively more respondents reported additional
hiring, although a majority of respondents still reported
a need for skilled workers. Business spending was
mixed, with a very slight decline in spending on
services but a modest increase in capital
expenditures. Expectations for overall business activity
remained positive. Fifty percent of respondents
expected general business conditions to improve over
the next six months while only 10 percent expected
conditions to worsen.
Current Activity
Overall business activity picked up in March. The
general business conditions index increased to 7.
Thirty-one percent of firms surveyed indicated that
general business conditions improved, which was an
increase from February, when 26 percent of firms
reported improving business conditions. The sales
index moved out of negative territory in March to land
at 0. Thus, twenty-six percent of respondents indicated
an increase in sales while the same share reported a
decline.
Business spending was a little more mixed in March.
Spending on services rose, although the index
remained in negative territory, at -2. Overall capital
expenditures were modest, with the index rising to 7,
and the index for business investment in equipment or
software increased to 14 from 9 in the previous month.
Twenty-one percent of respondents indicated that
they increased spending on equipment or software in
March, which was largely similar to the most recent
three months, but down from 31 percent in
November.
Employment
Labor market conditions appeared to improve for
Maryland firms in March. The employment index
registered 19, up from a reading of 2 last month. In the
March survey, 26 percent of respondents reported that
they added workers in the month—up from 14 percent
in February. Furthermore, the average workweek
index increased from -7 in February to 7 in March.
Meanwhile, the labor availability index has remained in
negative territory for 18 consecutive months.
Index
General Business Activity
80
60
40
20
0
-20
-40
-60
-80
Mar-09
Mar-10
Mar-11
Mar-12
Current Activity
1
Mar-13
Mar-14
Mar-15
Expectations
Mar-16
Mar-17
Regional Surveys of Business Activity
March 30, 2017
Maryland Survey of Business Activity
Employment
60
40
Index
20
0
-20
-40
-60
Mar-09
Mar-10
Mar-11
Mar-12
Current Activity
Expectations for future labor market conditions
generally improved again in March. The employment
expectations index rose to 27 from 19 in February and
15 in January. With almost 30 percent of respondents
expecting to increase hiring in March, expectations are
starting to approach the robust levels of early 2016
and most of 2015. In the March survey, only 2 percent
of respondents anticipated reducing their workforce
over the next six months compared to 7 percent in
February and 15 percent in January.
Survey respondents are anticipating higher wages in
the near term. Fifty-three percent of respondents
indicated they planned on raising wages over the next
six months compared to 47 percent in February.
Prices
Respondents reported that input prices rose 2.2
percent in March on an annualized basis, up from 1.6
percent last month. Output prices rose 1.6 percent,
also marking an increase from 0.9 percent in
February. Expectations for price growth over the next
six months were generally stable in March, with input
prices expected to grow 2.5 percent (up from 2.4
percent in February) and output price growth steady at
1.9 percent, on an annualized basis.
Expectations
Survey respondents’ optimism about the near term
was relatively stable, according to the March survey
results. The expectations index for general business
2
Mar-13
Mar-14
Mar-15
Mar-16
Mar-17
Expectations
conditions stood at 40, down slightly from 44 last
month. Fifty percent of respondents expected
business conditions to improve over the next six
months, up from the recent low of 19 percent in
September. Expectations for hiring improved and
respondents anticipated raising wages. The outlook for
business spending indicated moderate spending and
capital expenditures in the near term.
The latest survey results indicated that the Maryland
economy expanded in March but remained somewhat
soft. Overall business conditions improved, as sales
and some business spending indexes increased, but
all indexes remained at a subdued level. Labor market
indexes showed increased hiring and wages, although
firms continue to report a need for additional skilled
labor. Finally, expectations for near-term business
conditions and hiring remained upbeat.
Contact
Ann Battle Macheras
Vice President, Research
Federal Reserve Bank of Richmond
Richmond Office: 804.697.8752
[email protected]
www.richmondfed.org
Regional Surveys of Business Activity
March 30, 2017
Maryland Survey of Business Activity
Business Activity Indexes
Business Conditions in Maryland
General Business Conditions
Sales
1,3
Current Conditions
Mar-17 Feb-17 Jan-17
Expectations2
Mar-17 Feb-17 Jan-17
7
0
0
-7
4
-2
40
44
44
43
37
37
19
-12
7
14
2
-14
-7
9
-8
-10
-8
21
27
-10
12
53
19
-5
19
42
15
-15
4
49
-2
7
14
-9
2
9
-2
0
4
12
10
7
9
16
7
4
17
13
2.2
1.6
1.6
0.9
1.8
1.2
2.5
1.9
2.4
1.9
2.7
2.0
Employment
Number of Employees
Availability of Skills Needed
Average Workweek
Wages
Spending
Business Services Expenditures
Total Capital Expenditures
Equipment or Software
Price Trends3
Prices Paid for Inputs
Prices Received for Outputs
Technical Notes:
2
Each index equals the percentage of responding firms reporting increase minus the percentage reporting decrease.
Data are not seasonally adjusted.
Expectations refer to the time period six months out from the survey period.
3
Price changes are expressed as a percent change, annualized.
1
3