According to the Institute for Supply Chain Management Report on Business, economic activity in the services sector grew in November for the 30th month in a row, with the Services Purchasing Managers’ Index registering 56.5%, up 2.1 percentage points from October.
Anthony Nieves, chair of the ISM Services Business Survey Committee, pointed out, “In November, the Services PMI registered 56.5%, 2.1 percentage points higher than October’s reading of 54.4%. The Business Activity Index registered 64.7%, a substantial increase of 9 percentage points compared to the reading of 55.7% in October. The New Orders Index figure of 56% is 0.5 percentage point lower than the October reading of 56.5%. The Supplier Deliveries Index registered 53.8%, 2.4 percentage points lower than the 56.2% reported in October.”
Nieves noted that the Supplier Deliveries index is the only ISM Report on Business index that is inversed, as a reading of above 50% indicating slower deliveries, typical as the economy improves and customer demand increases.
“The Prices Index was down 0.7 percentage point in November, to 70%,” Nieves maintained. “Services businesses still continue to struggle to replenish their stocks, as the Inventories Index contracted for the sixth consecutive month. The reading of 47.9% is up 0.7 percentage point from October’s figure of 47.2%. The Inventory Sentiment Index, 44.2%, down 2.2 percentage points from October’s reading of 46.4%, contracted for the fourth month in a row.”
Nieves stated that the services sector enjoyed an uptick in growth after pulling back in the previous two months, with the November rate gaining because of increases in business activity and employment.
Nieves added, “Supplier deliveries continued to slow, albeit at a slower rate in November. Based on comments from Business Survey Committee respondents, increased capacity and shorter lead times have resulted in a continued improvement in supply chain and logistics performance. A new fiscal period and the holiday season have contributed to stronger business activity and increased employment.”
The 13 services industries reported growth in November, ISM asserted, Real Estate, Rental & Leasing; Mining; Agriculture, Forestry, Fishing & Hunting; Other Services; Construction; Health Care & Social Assistance; Public Administration; Retail Trade; Professional, Scientific & Technical Services; Accommodation & Food Services; Utilities; Transportation & Warehousing; and Educational Services. Three industries reporting a decline in the month of November: Management of Companies & Support Services; Wholesale Trade; and Information.
