Businesses across South Carolina and North Carolina told the Federal Reserve they saw choppy economic expansion in December, but hold high expectations for future activity the next six months, including in prices, business spending and labor demand.
The Carolinas Survey of Business Activity report, compiled and distributed monthly in this region by the Federal Reserve Bank of Richmond and released Thursday, surveys businesses about their sales, inventories, and investment in new equipment, along with information about their employment picture, wages, prices paid for energy and material and prices received for goods and services.
Here are highlights:• General business: Survey results say the region’s economic expansion slowed in December, while expectations picked up. Sales fell, but business conditions and future expectations ratings rose to their highest readings since April 2011.
• Prices: Average price increases moved up incrementally, suggesting reduced pressure on profit margins for the month. Expected average increases in prices paid edged up from 2.09 percent to 2.21 percent, while average expected increases in prices received moved down from 1.60 percent to 1.51 percent.
• Business spending: The business services spending index dropped 3 points in December from November, after reaching its highest reading in five years. Current equipment or software spending also edged down in December.
• Labor market conditions: Labor demand readings suggested firms are adding people to their payrolls, even if at a slower pace than in November. Expectations showed much greater promise with forecast hiring rising to its highest level in 30 months in December. The expected average workweek also increased from November – adding encouragement about the region’s job market in the next six months.