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ISM Non-Manufacturing Index dipped to 55.9% in May 2022
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Economic activity in the services sector grew in May for the 24th month in a row — with the Services PMI® registering 55.9 percent — say the nation’s purchasing and supply executives in the latest Services ISM® Report On Business®.
The report was issued today by Anthony Nieves, CPSM, C.P.M., A.P.P., CFPM, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee: “In May, the Services PMI® registered 55.9 percent, 1.2 percentage points lower than April’s reading of 57.1 percent. This is the lowest reading since February 2021, when the index also registered 55.9 percent. The Business Activity Index registered 54.5 percent, a decrease of 4.6 percentage points compared to the reading of 59.1 percent in April, and the New Orders Index figure of 57.6 percent is 3 percentage points higher than the April reading of 54.6 percent.
“The Supplier Deliveries Index registered 61.3 percent, 3.8 percentage points lower than the 65.1 percent reported in April. (Supplier Deliveries is the only ISM® Report On Business® index that is inversed; a reading of above 50 percent indicates slower deliveries, which is typical as the economy improves and customer demand increases.)
“The Prices Index dropped from the all-time high of 84.6 percent in April, decreasing 2.5 percentage points to 82.1 percent. Services businesses continue to struggle to replenish inventories, as the Inventories Index grew, but at a slower rate. The reading of 51 percent is down 1.3 percentage points from April’s figure of 52.3 percent. The Inventory Sentiment Index (44.5 percent, down 2.2 percentage points from April’s reading of 46.7 percent) contracted in May for the third consecutive month, indicating that inventories are in ‘too low’ territory and insufficient for current business requirements.”
Nieves continues, “According to the Services PMI®, 14 industries reported growth. The composite index indicated growth for the 24th consecutive month after a two-month contraction in April and May 2020. Growth continues — albeit slower — for the services sector, which has expanded for all but two of the last 148 months. The sector’s slowdown was due to a decline in business activity and slowing supplier deliveries. The Employment Index (50.2 percent) returned to expansion territory, and the Backlog of Orders Index grew, though at a slower rate. COVID-19 continues to disrupt the services sector, as well as the war in Ukraine. Labor is still a big issue, and prices continue to increase.”
INDUSTRY PERFORMANCE
The 14 services industries reporting growth in May — listed in order — are: Mining; Construction; Real Estate, Rental & Leasing; Educational Services; Transportation & Warehousing; Management of Companies & Support Services; Utilities; Accommodation & Food Services; Wholesale Trade; Professional, Scientific & Technical Services; Arts, Entertainment & Recreation; Other Services; Health Care & Social Assistance; and Public Administration. The three industries reporting a decrease are: Agriculture, Forestry, Fishing & Hunting; Retail Trade; and Information.
Posted: June 3, 2022 Friday 10:00 AM