ISM: Non-Manufacturing Sector Growth Continues in August

The ISM Services Index (formerly non-manufacturing sector) grew in August for the third consecutive month. The index registered 56.9% in August, 1.2 percentage points lower than the July reading.

Fifteen of the eighteen non-manufacturing industries reported growth. Many respondents are “mostly optimistic and industry specific about business conditions and the economy as businesses are starting to reopen. Industries that have not reopened remain concerned about the ongoing uncertainty. There is a challenge with capacity and logistics due to the pandemic and the impact on deliveries and order fulfillment.”

The Business Activity Index registered 62.4% in August, a 4.8 percentage point decrease from the July reading of 67.2%. This represents growth for the third consecutive month.

Service sector employment contracted for the sixth month in a row and registered 47.9%, up 5.8 percentage points from the July reading of 42.1%. Eight industries reported increased employment.

The New Orders Index registered 56.8%, a decrease of 10.9 percentage points from the July reading of 67.7%. This is the third consecutive month of growth in New Orders after two months of contraction. Comments from respondents include: “Preparation of reopening” and “Recovery of business from historic lows.”

Supplier deliveries remained slow, as the index registered 60.5%, which is 5.3 percentage points higher than the 55.2% reported in July. A reading above 50% indicates slower deliveries.


Read the ISM release