According to the Institute for Supply Management Report On Business, economic activity in the services sector, which includes retail, grew in September for the 28th month in a row, but the Purchasing Managers’ Index for the sector slipped to 56.7%.
In the sector, the Business Activity Index registered 59.1%, down 1.8 percentage points compared to the August reading of 60.9%. The New Orders Index figure of 60.6% came in 1.2 percentage points lower than August’s 61.8% reading.
Anthony Nieves, chair of the ISM Services Business Survey Committee, stated, “The Supplier Deliveries Index registered 53.9%, 0.6 of a percentage point lower than the 54.5% reported in August. Supplier Deliveries is the only ISM Report On Business index that is inversed: A reading of above 50% indicates slower deliveries, which is typical as the economy improves and customer demand increases. The Prices Index decreased for the fifth consecutive month in September, down 2.8 percentage points to 68.7%. Services businesses still continue to struggle to replenish their stocks, as the Inventories Index contracted for the fourth consecutive month. The reading of 44.1% is down 2.1 percentage points from August’s figure of 46.2%. The Inventory Sentiment Index, 47.2 %, up 0.1 percentage point from August’s reading of 47.1%, contracted for the second consecutive month in September.”
The services sector suffered a slight pullback in growth for the month of September due to decreases in business activity and new orders,” Nieves noted. “Employment improved and supplier deliveries slowed at a slightly slower rate. Based on comments from Business Survey Committee respondents, there have been improvements regarding supply chain efficiency, operating capacity and materials availability. However, performance remains less than ideal. Employment continued to improve despite the restricted labor market.”
According to ISM 15 services industries enjoyed growth in September: Mining; Other Services; Educational Services; Agriculture, Forestry, Fishing & Hunting; Public Administration; Retail Trade; Wholesale Trade; Information; Utilities; Professional, Scientific & Technical Services; Health Care & Social Assistance; Finance & Insurance; Real Estate, Rental & Leasing; Construction, and Management of Companies & Support Services. The three industries reporting a decrease in the month of September were Accommodation & Food Services; Arts, Entertainment & Recreation, and Transportation & Warehousing
