The ISM Services Index decreased 5 percentage points (pp) to 48.8%.
“Eight industries reported growth in June. Though the Services PMI® contracted for the second time in three months, that was preceded by 15 consecutive months of growth, a contraction in December 2022 and 30 months of expansion before that. That indicates sustained growth for the sector, as the PMI® has not recorded back-to-back months in contraction since April and May 2020,” said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee.
The Business Activity Index registered 49.6%, which is 11.6 pp lower than the 61.2% recorded in May and the first month of contraction since May 2020. The Supplier Deliveries Index registered 52.2%, 0.5 pp lower than the 52.7% recorded in May. (A reading of below 50 percent indicates faster deliveries). The Prices Index registered 56.3% in June, a 1.8 pp decrease from May’s reading of 58.1%. Respondents commented: “Inflation continues to be a general concern for both purchasers and sellers. For example, with inflation continuing, will customers have enough discretionary funds to spend?” (Retail Trade)
The Inventories Index contracted in June, registering at 42.9%, a decrease of 9.2 pp from May’s reading of 52.1% and the Employment Index registered at 46.1%, a 1.0 pp decrease compared to the 47.1% recorded in May. Respondents commented: “Sales and traffic remain soft compared to last year. High gas prices in California and constant news about inflation and restaurant menu prices are culprits.” (Accommodation & Food Services)
The Inventory Sentiment Index expanded for the 14th consecutive month, registering 64.1%, up 6.4 pp from May’s reading of 57.7%. This reading indicates that respondents feel their inventories are too high when correlated to business activity levels.
Read the ISM release.
