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ISM Non-Manufacturing Index fell to 59.9% in January 2022
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Economic activity in the services sector grew in January for the 20th month in a row — with the Services PMI® registering 59.9 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 January, the Services PMI® registered 59.9 percent, 2.4 percentage points below December’s seasonally adjusted reading of 62.3 percent. The Business Activity Index registered 59.9 percent, a decrease of 8.4 percentage points compared to the seasonally adjusted reading of 68.3 percent in December, and the New Orders Index registered 61.7 percent, 0.4 percentage point lower than the seasonally adjusted reading of 62.1 percent reported in December.
“The Supplier Deliveries Index registered 65.7 percent, 1.8 percentage points higher than the 63.9 percent that was reported in December. (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 registered 82.3 percent, down 1.6 percentage points from the seasonally adjusted December figure of 83.9 percent. Services businesses continue to struggle replenishing inventories, as the Inventories Index (49.4 percent, up 2.7 percentage points from December’s reading of 46.7 percent) and the Inventory Sentiment Index (registering 47.5 percent, up a healthy 9.2 percentage points from December’s reading of 38.3 percent) remained in contraction or ‘too low’ territory in January.”
Nieves continues, “According to the Services PMI®, 15 services industries reported growth. The composite index indicated growth for the 20th consecutive month after a two-month contraction in April and May 2020. Although there was a pullback for most of the subindexes in January, the rate of growth remains strong for the services sector, which has expanded for all but two of the last 144 months. Respondents continue to be impacted by coronavirus pandemic-related supply chain issues, including capacity constraints, demand-pull inflation, logistical challenges and labor shortages. Moreover, the COVID-19 omicron variant has disrupted operations, especially through reduced staffing levels. Despite these impediments, business activity and economic growth continue.”
INDUSTRY PERFORMANCE
The 15 services industries reporting growth in January — listed in order — are: Construction; Retail Trade; Health Care & Social Assistance; Public Administration; Real Estate, Rental & Leasing; Utilities; Professional, Scientific & Technical Services; Other Services; Educational Services; Finance & Insurance; Mining; Management of Companies & Support Services; Transportation & Warehousing; Wholesale Trade; and Accommodation & Food Services. The three industries reporting a decrease in January are: Agriculture, Forestry, Fishing & Hunting; Arts, Entertainment & Recreation; and Information.
Posted: February 3, 2022 Thursday 10:00 AM