Federal Reserve Bank of Philadelphia
03/24/2026 | Press release | Distributed by Public on 03/24/2026 07:16
March 2026 Nonmanufacturing Business Outlook Survey
Note: Survey responses were collected from March 9 to March 19.
Nonmanufacturing activity in the region declined this month, according to the firms responding to the March Nonmanufacturing Business Outlook Survey. The indexes for general activity at the firm level and new orders were both negative, while the sales/revenues index moved higher. The firms reported overall decreases in both full- and part-time employment. Both price indexes continued to indicate overall increases in prices, but the prices received index fell below its long-run average. Expectations for growth over the next six months were less widespread this month.
Current and Future General Activity Indexes for Firms
Current Indexes Are Mixed
The diffusion index for current general activity at the firm level fell 14 points to -8.3, its first negative reading since June (see Chart 1). More than 19 percent of the firms reported increases (down from 28 percent last month), 27 percent reported decreases (up from 22 percent), and 54 percent reported no change in activity (up from 50 percent). The new orders index rose 5 points to -4.7, remaining negative for the second consecutive month. Almost 19 percent of the firms reported increases in new orders, 23 percent reported decreases, and 35 percent reported no change. The sales/revenues index rose from 8.2 to 13.2. Almost 34 percent of the responding firms reported increases in sales/revenues, while 21 percent reported decreases. The regional activity index fell 7 points to -23.9 this month, its lowest reading since May.
Firms Report Overall Decreases in Employment
The full-time employment index fell 22 points to -11.3 this month, its lowest reading since August 2024. Almost 14 percent of the firms reported decreases in full-time employment (up from 8 percent last month), 2 percent reported increases (down from 19 percent), and 81 percent reported steady employment levels (up from 70 percent). The part-time employment index fell 13 points to -7.2 this month, its lowest reading since May.
Firms Continue to Report Price Increases
Price indicator readings suggest continued increases in prices for inputs and prices for the firms' own goods and services, although both indexes moved down this month. The prices paid index ticked down 2 points to 39.1 (see Chart 2). Almost 44 percent of the respondents reported higher input prices, 36 percent reported no change, and 4 percent reported decreases. Regarding prices for the firms' own goods and services, the prices received index fell 13 points to 9.3 this month, its lowest reading since June. Almost 18 percent of the firms reported increases in prices received, and 8 percent reported decreases. Most of the firms (60 percent) reported no change in prices for their own goods and services.
Prices Paid and Prices Received Index
Firms were Mixed on Quarterly Sales/Revenues
In this month's special questions, the firms were asked to estimate their total sales/revenues growth for the first quarter ending this month compared with the fourth quarter of 2025; they were also asked about factors constraining business operations. Equal shares of respondents (41 percent) expected increases and decreases in first-quarter sales/revenues. In the current quarter, nearly 89 percent of the firms reported uncertainty as at least a slight constraint on business operations, similar to when this question was last asked in December. Over 77 percent of the firms cited energy markets as at least a slight constraint, up from 38 percent last quarter. Looking ahead over the next three months, most of the firms expect the impacts of energy markets and uncertainty to worsen.
Future Indicators Decline
The future general activity indexes continued to suggest the firms expect growth at their own companies over the next six months, but expectations were less widespread this month. The diffusion index for future general activity at the firm level fell 19 points to 12.5, its lowest reading since December (see Chart 1). Thirty-six percent of the firms expect an increase in activity at their firms over the next six months, 24 percent expect decreases, and 40 percent expect no change. The future regional activity index also fell, declining 16 points to -1.6, its first negative reading since December.
Summary
Responses to this month's Nonmanufacturing Business Outlook Survey suggest an overall decline in nonmanufacturing activity among the firms in the region. The indicators for firm-level general activity and new orders were both negative, but the sales/revenues index rose. The full- and part-time employment indexes both turned negative, suggesting overall decreases in employment. The prices paid and prices received indexes moved down but continued to indicate increases in prices, on balance. Expectations for growth over the next six months were less widespread this month.
Special Questions (March 2026)
1. How will your firm's total sales/revenues for the first quarter of 2026 compare with that of the fourth quarter of 2025?
An increase of: % of firms Subtotals
10% or more 3.1 % of firms reporting an increase: 40.6
5-10% 15.6
0-5% 21.9
No change 18.8
A decline of:
0-5% 28.1 % of firms reporting a decrease: 40.6
5-10% 3.1
10% or more 9.4
2. In the current quarter, to what degree have the following factors acted as constraints on business operations?
Not at all
(%) Slightly
(%) Moderately
(%) Significantly
(%)
Energy markets 22.9 60.0 2.9 14.3
Financial capital 60.6 18.2 18.2 3.0
Labor supply 29.4 47.1 17.6 5.9
Supply chains 48.5 42.4 9.1 0.0
Uncertainty 11.4 25.7 31.4 31.4
Other factors 57.1 28.6 0.0 14.3
3. Over the next three months, how do you expect the impacts of the following factors as constraints on business operations to change?
Worsen
(%) Stay the same
(%) Improve
(%)
Energy markets 76.5 8.8 14.7
Financial capital 35.3 55.9 8.8
Labor supply 9.1 81.8 9.1
Supply chains 40.0 60.0 0.0
Uncertainty 71.9 18.8 9.4
Other factors 40.0 60.0 0.0
Summary of Returns (March 2026)
Summary of Returns
Return to the main page for the Nonmanufacturing Business Outlook Survey.
Federal Reserve Bank of Philadelphia published this content on March 24, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on March 24, 2026 at 13:16 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]