Economic activity in the services sector expanded for the fifth consecutive month in November, according to the Institute for Supply Management’s Report on Business, with retail in positive territory.
The report, issued by Steve Miller, chair of the ISM Services Business Survey Committee, noted that the November PMI, while still in growth territory, dropped 3.9 percentage points from October’s 56%.
“The Business Activity Index registered 53.7% in November, 3.5 percentage points lower than the 57.2% recorded in October, indicating a fifth month of expansion after a contraction in June. The New Orders Index also recorded a reading of 53.7% in November, 3.7 percentage points lower than October’s figure of 57.4%. The Employment Index landed in expansion territory for the fourth time in five months: The reading of 51.5 % is a 1.5-percentage point decrease compared to the 53% recorded in October.”
He added that the Supplier Deliveries Index came in at 49.5%, 6.9 percentage points lower than the 56.4% recorded in October. The index occupied contraction territory for the sixth time in 2024 — indicating faster supplier delivery performance — after two months at a slower fulfillment pace. Supplier Deliveries is the only ISM report index that is inversed, as a reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand gains.
“The Prices Index registered 58.2% in November, a 0.1-percentage point increase from October’s reading of 58.1%,” Miller noted. “The Inventories Index returned to contraction territory in November after three months in expansion, registering 45.9%, a decrease of 11.3 percentage points from October’s figure of 57.2%. The Inventory Sentiment Index expanded for the 19th consecutive month, registering 54.6%, up 1.6 percentage points from October’s reading of 53%. The Backlog of Orders Index remained in contraction territory for a fourth consecutive month, registering 47.1% in November, a 0.6-percentage point decrease from the October reading of 47.7%.”
The 14 services industries reporting growth in November were Accommodation & Food Services; Arts, Entertainment & Recreation; Health Care & Social Assistance; Wholesale Trade; Agriculture, Forestry, Fishing & Hunting; Public Administration; Finance & Insurance; Management of Companies & Support Services; Retail Trade; Transportation & Warehousing; Information; Professional, Scientific & Technical Services; Construction, and Utilities. The three industries reporting a contraction in the month of November were Mining; Real Estate, Rental & Leasing; and Educational Services.
On the manufacturing side, the three industries reporting growth in November were: Food, Beverage & Tobacco Products; Computer & Electronic Products, and Electrical Equipment, Appliances & Components. The 11 industries reporting contraction in November were Printing & Related Support Activities, Plastics & Rubber Products, Chemical Products, Paper Products, Transportation Equipment, Fabricated Metal Products, Furniture & Related Products, Machinery, Nonmetallic Mineral Products, Miscellaneous Manufacturing and Primary Metals.
The Manufacturing PMI registered 48.4% in November, 1.9 percentage points higher than October’s 46.5 %. The overall U.S. economy continued in expansion for the 55th month based on the ISM’s analysis, as a Manufacturing PMI above 42.5%, over a period of time, generally indicates an expansion of the overall economy.
