Service Sector PMI Records Highest Reading In 12 Months

November services economy activity remained in growth mode, according to the new edition of the ISM Report on Business, which was issued Tuesday by the Institute for Supply Management (ISM).

The Services PMI—at 52.7 (a reading of 50 or higher signals growth)—increased 0.9, growing at a faster rate for the 11th consecutive month. ISM said that the services sector has seen growth in 41 of the last 42 months, with December 2022 being the one month with a decline. 

The November Services PMI posted its highest reading over the last 12 months with December 2022’s 49.2 marking the lowest reading for that period. That is the second piece of positive news. ISM’s November Manufacturing PMI was flat month-over-month, but showed indication of upward growth in the months ahead.

For impact analysis of the results, read: Services sector sees growth for the 11th consecutive month, reports ISM

ISM reported that 15 of the 18 service sectors it tracks saw gains in November, including agriculture, forestry, fishing & hunting; health care & social assistance; real estate, rental & leasing; arts, entertainment & recreation; transportation & warehousing; retail trade; utilities; accommodation & food services; other services; management of companies & support services; finance & insurance; public administration; construction; wholesale trade; and educational services. Sectors posting annual declines in November included information; mining; and professional, scientific & technical services.

The report’s equally weighted subindexes that directly factor into the NMI were mixed from October to November, including:

• Business activity/production, at 55.1, increased 1%, growing at a faster rate for the 42nd consecutive month with 11 sectors reporting growth;
• New orders, at 55.5, were flat, growing at the same rate for the 11th consecutive month with 11 sectors reporting growth;
• Employment, at 50.7, rose 0.5%, growing at a faster rate for the sixth consecutive month with 10 sectors reporting growth;
• Backlog of orders, at 49.1, fell 1.8% contracting after growing in October with four sectors reporting growth;
• Supplier deliveries, at 49.6, (a reading above 50 indicates slower deliveries) were off 2.1% from October, growing faster at a slower rate for the second consecutive month with six sectors reporting slower deliveries;
• Prices, at 58.3, fell 0.3%, increasing at a faster rate for the 78th consecutive month with 11 sectors reporting growth; and
• Inventories, at 55.4, were up 5.9% growing after contracting in October with eight sectors reporting growth.