The ISM Services Index registered 55.3% in February; 3.4 percentage points lower than the January reading of 58.7%. This reading represents the ninth straight month of growth for the services sector, which has expanded for all but two of the last 133 months.
Seventeen non-manufacturing industries reported growth. Most respondents are “mostly optimistic about business recovery and the economy. Production-capacity constraints, material shortages and challenges in logistics and human resources are impacting the supply chain.”
The Business Activity Index registered 55.5% in February, a decrease of 4.4 percentage point from the adjusted January reading of 59.9%. This represents growth for the ninth consecutive month.
Service sector employment grew in February for the second consecutive month and registered 52.7% in February, down 2.5 percentage points from the January reading of 55.2%.
The New Orders Index registered 51.9%, a decline of 9.9 percentage points from the January reading of 61.8%. This is the ninth consecutive month of growth in New Orders. Comments from respondents include: “An increase in inventories needed to meet new demands” and “Increased demand due to building stock to cover through the Lunar New Year.”
Supplier deliveries remained slow, as the index 60.8%, which is 3 percentage points higher than the 57.8%reported in January. A reading above 50% indicates slower deliveries.
Read the ISM release.