The ISM services index decreased 1.2 percentage points (pp) to 51.4% – the 15th consecutive month of expansion for the services sector.
“Twelve industries reported growth in March. The Services PMI®, by being above 50 percent for the 15th 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 slower rate in March – for the sector,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
The Business Activity Index registered 57.4% in March, which is 0.2 pp higher than the 57.2% recorded in February. The Supplier Deliveries Index continued in contraction for the second straight month after one month in expansion (or slower) territory in January, registering 45.4%, 3.5 pp lower than the 48.9% recorded in February. In the last 12 months, the average reading of 48.7% (with a low of 45.4% this month) reflects the fastest supplier delivery performance since December 2022. (A reading of below 50 percent indicates faster deliveries.) The Prices Index registered 53.4% in March, a 5.2 pp decrease from February’s reading of 58.6%. Respondents commented: “Our market is shaping up to be the first normal year since the start of COVID-19. Volumes were down in 2022 and 2023. A price correction was made last year, setting up sales to move back to historical volumes.” (Agriculture, Forestry, Fishing & Hunting)
The Inventories Index contracted in March, registering 45.6%, a decrease of 1.5 pp, and the Employment Index registered at 48.5%, a 0.5 pp increase from February. Respondents commented: “National business conditions remain strong in the industrial construction market. Labor is still tight across the country for skilled trades positions.” (Construction)
The Inventory Sentiment Index expanded for the 11th consecutive month, registering at 55.7%, down 1 pp from February. This reading indicates that respondents feel their inventories are too high when correlated to business activity levels.
Read the ISM release.
