The ISM Services Index increased 4.4 percentage points (pp) to 53.8%, after contracting in April for the first time since December 2022.
“Thirteen industries reported growth in May. The Services PMI® — after a contraction in April preceded by 15 consecutive months of growth after a contraction in December 2022 and 30 months of expansion before that — has indicated sustained growth for the sector. The reading of 53.8 percent in May reflects month-over-month growth,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
The Business Activity Index registered 61.2%, which is 10.3 pp higher than the 50.9% recorded in April. The Supplier Deliveries Index registered 52.7%, 4.2 pp higher than the 48.5 recorded in April. (A reading of below 50 percent indicates faster deliveries). The Prices Index registered 58.1% in May, a 1.1 pp decrease from April’s reading of 59.2%. Respondents commented: “General uncertainty regarding the U.S. Federal Reserve’s position on future interest rates and the current political environment is affecting consumer sentiment.” [Professional, Scientific & Technical Services]
The Inventories Index grew in May, registering at 58.1%, a 1.1 pp decrease from April’s reading of 59.2 % and the Employment Index registered at 47.1%, a 1.2 pp increase compared to the 45.9% recorded in April. Respondents commented: “Companies in most industries continue to be deliberate with employee and nonemployee labor hiring decisions. Concerns about the upcoming election loom large, as well as uncertainty around the current economic climate, particularly inflation.” (Management of Companies & Support Services)
The Inventory Sentiment Index expanded for the 13th consecutive month, registering at 57.5%, down 5.2 pp from April’s reading of 62.9%. This reading indicates that respondents feel their inventories are too high when correlated to business activity levels.
Read the ISM release.
