ISM: Service Sector Growth Continues in July

The ISM Services Index registered 64.1% in July; 4.0 percentage points higher than the June reading of 60.1%. This reading represents the fourteenth straight month of growth for the services sector, which has expanded for all but two of the last 138 months.

Seventeen non-manufacturing industries reported growth. Survey respondents noted “Surgical volumes continue to increase, reflecting pent-up demand for services. However, the COVID-19 delta variant is impeding our ability to manage increased surgical volumes due to increased COVID-19 case admissions. Consistency of supply in a couple of categories (coagulation tubes and nitrile gloves) remains challenging, though moderately manageable.”

The Business Activity Index registered 67.0% in July, an increase of 6.6 percentage points from the June reading of 60.4%. This represents growth for the fourteenth consecutive month.

Service sector employment rose in July for the first month after the June decrease, and registered 53.8% in July, up from the June reading of 49.3%. Thirteen industries reported growth in employment for the month.

The New Orders Index was 63.7%, an increase of 1.6 percentage points from the June reading of 62.1%.  Comments from respondents include: “More companies are opening for business as usual after the pandemic” and “Customer demand continues to increase.”

The supplier deliveries remained slow, and the index registered 72.0% in July, which is 3.5 percentage points higher than the 68.5% reported in June. A reading above 50% indicates slower deliveries.

Read the ISM release.