ISM: Service sector expands in April

The ISM Services Index registered 51.9%, 0.7 percentage point higher than March’s reading of 51.2%. The composite index indicated growth in April for the fourth consecutive month after a reading of 49.2% in December, the first contraction since May 2020 (45.4%).

“Fourteen industries reported growth in April. The Services PMI®, by being above 50 percent for a fourth month after a single month of contraction and a prior 30-month period of expansion, continues to indicate sustained growth for the sector. The composite index has indicated expansion for all but three of the previous 159 months.”

The Business Activity Index registered 52.0%, a 3.4-percentage point decrease compared to the reading of 55.4% in March.

The employment Index registered 50.8%, up 0.5 percentage point from the March figure of 51.3%. Comments from respondents include: “We continue to hire to build up our staffing levels” and “Attrition without backfills.”

The New Orders Index registered 56.1%, up 3.9 percentage points from the March reading of 52.2%. The index indicated expansion for the fourth consecutive month after contracting in December, ending a string of 30 consecutive months of growth. Comments from respondents include: “Demand outpacing forecasts” and “New requests for services from customers.”

The Supplier Deliveries Index registered 48.6%, up 2.8 percentage points from the 45.8% recorded in March. A reading above 50% indicates slower deliveries, while a reading below 50% indicates faster deliveries. The April reading indicates supplier deliveries are faster, but at a slower rate compared to the previous month. Comments from respondents include: “Supply chain capacity continues to increase” and “Suppliers are catching up as demand has flattened and raw material shortages are improving.”

Read the ISM release.