ISM: Service sector declines in June

The ISM Services Index registered 53.9%, 3.6 percentage points increase than May’s reading of 50.3%. The composite index indicated growth in June for the sixth consecutive month after a reading of 49.2% in December, the first contraction since May 2020 (45.4%).

“The past relationship between the Services PMI® and the overall economy indicates that the Services PMI® for June (53.9 percent) corresponds to a 1.4-percent increase in real gross domestic product (GDP) on an annualized basis.”

The Business Activity Index registered 59.2%, a 7.7 percentage points increase compared to the reading of 51.5% in May.

The employment Index registered 53.1%, up 3.9 percentage points from the May figure of 49.2%. Comments from respondents include: “Unable to find qualified candidates for some open positions” and “Finally able to fill some positions that have been open for some time.”

The New Orders Index registered 55.5%, 2.6 percentage points higher than the May reading of 52.9%. The index indicated expansion for the sixth consecutive month after contracting in December, ending a string of 30 consecutive months of growth. Comments from respondents include: “Business expansion and higher seasonal demand” and “New customers added as our business continues to grow.”

The Supplier Deliveries Index registered 47.6%, down 0.1 percentage point from the 47.7% recorded in May. A reading above 50% indicates slower deliveries, while a reading below 50% indicates faster deliveries. The June reading indicates supplier deliveries are faster. Comments from respondents include: “Improved fulfillment” and “Trucking seems sufficient, but rail is lagging.”

Read the ISM release.