ISM: Service sector expands in October

The ISM Services Index registered 54.4%; 2.3 percentage points lower than September’s reading of 56.7%. This reading represents the 29th straight month of growth for the services sector.

16 industries reported growth. The composite index indicated growth for the 29th consecutive month after a two-month contraction in April and May 2020. Growth continues at a slower rate for the services sector, which has expanded for all but two of the last 153 months. The sector had a pullback in growth for the second consecutive month in October due to decreases in business activity, new orders, and employment.”

The Business Activity Index registered 55.7%, a decrease of 3.4 percentage points compared to the reading of 59.1% in September.

Service sector employment contracted in October, and registered 49.1%, 3.9 percentage points lower than September reading of 53.0%. eleven industries reported growth in employment for the month.

The New Orders Index was 56.5%, down 4.1 percentage points from the prior month’s reading of 60.6%. Comments from respondents include: “New capital projects implemented” and “Higher due to end-of-year activity.”

The supplier deliveries index registered 56.2% in October, up 2.3 percentage points from the prior month. A reading above 50% indicates slower deliveries.

Read the ISM release.