Business services in a seven-state region that includes Oklahoma grew steadily in July, according to a survey released by the Federal Reserve Bank of Kansas City.
“In July, services activity rose solidly compared to previous months, but remained below year-ago levels,” Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City. “Meanwhile, over a third of businesses reported higher business costs over the past six months, and expectations for future activity fell slightly.”
The Kansas City Fed’s monthly survey of Tenth District Services provides information on several indicators, including sales, revenue, employment and capital spending while identifying changes in prices of input materials and selling prices.
Survey participants represent a variety of industries, including retail and wholesale trade, automobile dealers, transportation, information, high-tech and professional services, real estate, education, restaurants, health services, tourism and other services firms.
The Federal Reserve Bank of Kansas City serves the Tenth Federal Reserve District, encompassing Oklahoma, the western third of Missouri; Kansas, Colorado, Nebraska, Wyoming and the northern half of New Mexico. As part of the nation’s central bank, the Bank participates in setting national monetary policy, supervising and regulating numerous commercial banks and bank holding companies. It also provides financial services to depository institutions.
According to the Fed’s survey, general revenue and sales jumped in July, and the indexes for employment, employee hours, and wages and benefits indexes expanded further. The part-time employment and capital expenditures indexes rose into positive territory in July after declining in previous months.
Month-over-month indexes for inventory and access to credit continued to decline. The increase in the general revenue/sales index was driven by more activity for retail, travel and tourism, transportation, health services, and real estate, while restaurant activity declined.
Survey respondents were asked about changes in business costs and their need for physical infrastructure since managing the effects of COVID-19.
A total of 65% of respondents reported that their need for physical infrastructure had not changed in the past six months, and 30% said it had decreased. Moving forward, 65% anticipated that their need for physical infrastructure would not change in the medium term (one to two years).
Moreover, 67% of respondents said they had used a work-from-home policy in the last six months, but only a small share reported that a portion of their workforce will now permanently work from home.