ISM: Service sector expanded in November

The ISM Services Index increased 0.9 percentage points (pp) to 52.7% in November—the eleventh consecutive month of expansion for the services sector.

“Fifteen industries reported growth in November. The Services PMI®, by being above 50 percent for the 11th month after a single month of contraction and a prior 30-month period of expansion, continues to indicate sustained growth for the sector, and at a slightly faster rate in November,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.

The Business Activity Index increased 1 pp to 55.1% in November. The Supplier Deliveries Index indicated faster performance for the second consecutive month in November, registering 49.6%, up 2.1 pp from October. The index has been in “faster” territory in 10 of the last 12 months. The Prices Index decreased 0.3 pp to 58.3%. Respondents commented: “Solid activity heading into the final stretch of the fourth quarter,” (Transportation & Warehousing) and “Business conditions remain steady at the end of 2023. Annual cost escalations are a bit higher than planned.” (Finance & Insurance)

The Inventories Index returned to growth in November, registering 55.4%, an increase of 5.9 pp, and the Employment Index registered 50.7%, up 0.5 pp from October. Respondents commented that, “Inventories in our extended supply chain look healthy, and fill rates are improving,” (Wholesale Trade) and “Candidate expectations during the hiring process have made staffing up more difficult.” (Retail Trade)

The Inventory Sentiment Index grew for the seventh consecutive month in November after one month of contraction in April, preceded by four consecutive months of growth and four months of contraction from August to November 2022. The index increased 7.8 pp to 62.2%, indicating that respondents feel their inventories are too high when correlated to business activity levels.

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