Survey respondents express more optimism for the next six months

In contrast to our second quarter survey, the diffusion index was only negative for one question. Survey participants again felt that the level of business activity in the U.S. decreased during the previous quarter, although when it came to the company's own performance, respondents were evenly split. They were also split on the questions concerning the number of employees.

The diffusion index was positive for the remaining three questions on wages, the price of the company's own goods, and capital expenditures. On wages and capital expenditures more respondents said "increasing" than last quarter while fewer reported their own goods prices increasing.

While the difference between manufacturers and non-manufacturers was not significant, overall manufacturers were slightly less positive on U.S. and company economic activity. There was less of a difference in responses to the other questions. This could reflect the fact that the strength of consumer spending noted elsewhere in this report is being felt primarily by retail and service firms.

Looking ahead at the next six months, there is a fairly sharp difference in the diffusion index for the first two questions (U.S. and company economic activity). Survey respondents are more positive about the next six months than they were about the previous quarter. There was less of a difference between manufacturers and non-manufacturers than noted above.

For the remaining questions, the diffusion indexes were similar to those noted above.

The special focus question asked whether respondents have implemented artificial intelligence (AI) tools in their business. AI is being hailed as something that could enhance productivity in a wide variety of applications. It is hoped that the effect will be much like how the personal computer and the Internet enhanced productivity in previous decades and set the stage for faster economic growth.

Results were similar between manufacturing and non-manufacturing firms. About 31% answered that they have or are currently using AI tools. About 44% have not explored the use of AI tools. Among the remaining 25% who had explored the possibilities of AI most had no plans to utilize AI in the near future.

As AI becomes more integrated into various technologies, it may become a more standard part of the work in many companies. We are still closer to the beginning of the adoption cycle in AI, though with nearly half of our respondents either using AI or having plans to use it in the future, it may not be long before AI becomes as indispensable as the Internet or the personal computer. This would suggest that further productivity gains could be possible in the future.