Economic activity in the services sector grew in November for the 18th month in a row — with the Services PMI® setting a record for the fifth time in 2021 — 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 November, the Services PMI® registered another all-time high of 69.1 percent, 2.4 percentage points above October’s reading of 66.7 percent, the former all-time high. Previous records were set in March (63.7 percent), May (64 percent) and July (64.1 percent). The data quickly explains the elevated Services PMI® reading, as two of the four equally weighted subindexes that directly factor into the composite index set or tied all-time highs. The Business Activity Index reached 74.6 percent, an increase of 4.8 percentage points compared to the reading of 69.8 percent in October, and the New Orders Index registered 69.7 percent, the same reading as last month’s figure. (The other two subindexes are Employment and Supplier Deliveries; both also contributed positively to the Services PMI® in November.)

“The Supplier Deliveries Index registered 75.7 percent, the same reading as in October. The all-time high is 78.3 percent, recorded in April 2020. (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.)

“Demand continues to be strong, reflected by two other subindexes in November. The Backlog of Orders Index registered 65.9 percent, 1.4 percentage points lower than October’s all-time high reading of 67.3 percent. The Prices Index reached its third-highest reading ever at 82.3 percent, down 0.6 percentage point from the October figure of 82.9 percent. Services businesses continue to struggle replenishing inventories, as the Inventories Index (48.2 percent, up 6 percentage points from October’s reading of 42.2 percent) and the Inventory Sentiment Index (an all-time low of 36.4 percent, down 0.9 percentage point from the previous month’s figure of 37.3 percent) stayed in contraction or 'too low' territory in November.”

Nieves continues, “According to the Services PMI®, all 18 services industries reported growth. The composite index indicated growth for the 18th consecutive month after a two-month contraction in April and May 2020. In November, record growth continued for the services sector, which has expanded for all but two of the last 142 months. Demand continues to outpace supply that has been impacted by capacity constraints, shortages of labor and materials, and logistical challenges. This has also caused demand-pull inflation that is affecting overall business conditions.”

INDUSTRY PERFORMANCE
All 18 services industries reporting growth in November — listed in order — are: Real Estate, Rental & Leasing; Transportation & Warehousing; Retail Trade; Agriculture, Forestry, Fishing & Hunting; Management of Companies & Support Services; Utilities; Wholesale Trade; Mining; Public Administration; Construction; Health Care & Social Assistance; Arts, Entertainment & Recreation; Other Services; Professional, Scientific & Technical Services; Finance & Insurance; Information; Educational Services; and Accommodation & Food Services. No industries are reporting contraction in November.