Service sector companies saw strong growth in May, the Federal Reserve Bank of Richmond said on Tuesday.

According to the Richmond Fed’s service-sector activity survey, the service sector revenues index rose to 11 in May from 2 in April, while the number of employees index gained to 12 from 7, the wages index inched up to 17 from 16 and the demand index rose to 17 from 11.

The indexes are the percentage of responding firms reporting increase, less the percentage reporting a decrease.

“Most measures of service sector growth increased … Survey results also reflected increased demand and an improvement in local business conditions, and firms were optimistic that these trends would continue in the coming months,” the report said.

The trend in current prices paid rose to 2.14 from 1.76 while falling to 1.32 from 1.59 for prices received.

The trend in expected price paid increased to 2.52 from 2.14, while prices received fell to 1.75 from 2.06.

All firms surveyed are located within the Fifth Federal Reserve District, which includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

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Chip Barnett

Chip Barnett

Chip Barnett is a journalist with more than 40 years of experience. Barnett is currently Senior Market Reporter for The Bond Buyer.