The ISM Services index decreased 0.8 percentage points (pp) to 52.6%—the 14th consecutive month of expansion for the services sector.
“Fourteen industries reported growth in February. The Services PMI®, by being above 50 percent for the 14th consecutive month (after a single month of contraction in December 2022 and a prior 30-month period of expansion), continues to indicate sustained growth — but at a slightly slower rate in February — for the sector,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
The Business Activity Index increased 1.4 pp to 57.2% in February. The Supplier Deliveries Index indicated faster performance after one month in slower (or expansion) territory, registering 48.9%, down 3.5 pp from January. In the last 12 months, the average reading of 48.7% (with a low of 45.8% in March) reflected the fastest supplier delivery performance since December 2022. (A reading of below 50 percent indicates faster deliveries.) The Prices Index registered 58.6% in February; a 5.4 pp decrease from January. Respondents commented: “Moderate increases in business activity so far. Improved supplier fill rates and steady pricing have resulted in increased levels of restocking as businesses prepare for spring and summer selling seasons.” (Wholesale Trade)
The Inventories Index contracted in February, registering 47.1%, a decrease of 2 pp, and the Employment Index registered 48.0%, down 2.5 pp from January. Respondents commented: Economy seems unsettled. Inflationary fears persist, yet some things are settling down…Layoffs in many industries, but many businesses are desperate for workers. Lots of contradictions.” (Public Administration)
The Inventory Sentiment Index grew for the 10th consecutive month in February 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 registered 56.7%, a 2.6-pp decrease from January. This reading indicates that respondents feel their inventories are too high when correlated to business activity levels.
Read the ISM release.
