The ISM Services Index grew by 1.1 percentage points (points) to 56%.
“Fourteen industries reported growth in October, up two from the 12 industries reporting growth in September. The Services PMI® has expanded in 20 of the last 22 months dating back to January 2023, and the October reading is 3.7 percentage points above its average of 52.3 percent for 2024.” The increase in the Services PMI® in October was driven by boosts of more than 4 percentage points for both the Employment and Supplier Deliveries indexes. The Business Activity and New Orders indexes both dropped by at least 2 percentage points. Each of the four sub indexes are now above their averages for 2024. Concerns over political uncertainty were again more prevalent than the previous month. Impacts from hurricanes and ports labor turbulence were mentioned frequently, although several panelists mentioned that the longshoremen’s strike had less of an impact than feared due to its short duration,” said Steve Miller, CPSM, CSCP, Chair of the Institute for Supply Management® (ISM®) Services Business Survey Committee.
Business Activity Index registered 57.2 percent in October, 2.7 points lower than the 59.9 percent recorded in September, a fourth month of expansion after contracting in June for the first time since May 2020. The Supplier Deliveries Index indicated slower performance for the second month in a row. The index registered 56.4 percent, up 4.3 points from the 52.1% recorded in September. (A reading of below 50 percent indicates faster deliveries). The Prices Index registered 58.1% in October, a 1.3 point decrease from September’s reading of 59.4%. Respondents commented: “The economy is still causing issues within our business and that of our suppliers.” (Wholesale Trade).
The Inventories Index remained in expansion territory for the third consecutive month. The reading of 57.2% was a 0.9 point decrease compared to the 58.1% reported in September. The Employment Index landed in expansion territory for its third time in four months; the reading of 53% is a 4.9-point increase compared to the 48.1% recorded in September. Respondents commented: “Monitoring inventories much closer than in the past. We’re refilling inventories for the fall and winter seasons are lower level than normal, but those decisions are easy to understand.” (Agriculture, Forestry, Fishing & Hunting).
The Inventory Sentiment Index expanded for the 18th consecutive month, but the reading of 53%, down 1 point from September’s reading of 54 percent, is its lowest in that time period. This reading indicates that respondents feel their inventories are too high when correlated to industry levels.
Read the ISM release.
