The ISM Services Index registered 55.3% in June; 0.6% lower than the May reading of 55.9%. This reading represents the 25th straight month of growth for the services sector; however, this is the lowest reading since May 2020 (45.2%).
Eighteen non-manufacturing industries reported growth in June. Accommodation & Food Services survey respondents noted “Supply chain and supplier reliability continues to improve for most of our key food and packaging needs,” construction survey respondents said “(Interest) rate increases have slowed sales but have not helped with supply challenges yet”, and Educational Services respondents remarked that “While activity dropped 2 percent from the previous month, activity volume was 47% higher compared to May 2021.”
The Business Activity Index registered 56.1% in June, an increase of 1.6% from the May reading of 54.5%.
Service sector employment contracted in June, and registered 47.4%, 2.8% lower than May’s reading of 50.2%. Seven industries reported growth in employment for the month.
The New Orders Index was 55.6%, down 2.0% from the prior month’s reading of 57.6%. Comments from respondents include: “More demand for financing to beat (interest) rate increases” and “New customers added, which has led to greater sales orders and business activity.”
The supplier deliveries index registered 61.9% in June, up 0.6% from the prior month. A reading above 50% indicates slower deliveries.
Read the ISM release.