Service sector

ISM: The services sector progressed in June

The ISM services index recorded 55.3% in June; 0.6% lower than May’s reading of 55.9%. This reading represents the 25e consecutive month of growth for the services sector; however, this is the lowest reading since May 2020 (45.2%).

Eighteen non-manufacturing industries posted growth in June. Respondents to the accommodation and food services survey noted that “supply chain and supplier reliability continues to improve for most of our core food and packaging needs”, Respondents to the construction survey said “(interest) rate increases have slowed sales but have not yet helped solve supply problems.” and respondents from educational services noted that “although activity was down 2% from the previous month, the volume of activity was 47% higher than in May 2021”.

The business activity index recorded 56.1% in June, a 1.6% increase from May’s reading of 54.5%.

Employment in the services sector contracted in June and recorded 47.4%, 2.8% below May’s reading of 50.2%. Seven industries recorded employment growth for the month.

The new orders index was 55.6%, down 2.0% from the previous month’s reading of 57.6%. Respondents’ comments include: “More demand for financing to counter (interest) rate hikes” and “New customers have been added resulting in increased orders and business activity”.

The supplier shipments index registered 61.9% in June, up 0.6% from the previous month. A reading above 50% indicates slower deliveries.

Read the ISM version.